DataQuick: California Foreclosure Activity Up Sharply in Q1
Submitted by
CalculatedRisk on Tue, 04/22/2008 - 8:41am (214 comments)
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I have a feeling this is going to a busy news day!
Best to all.
First!!!! inning
HFS! And I dont mean the DC area radio station.
Yikes!
wow....
good thing that the existing homes sales data was so strong today.
oh wait!
I am a little surprised its up so much since servicers/bagholders have been under a lot of pressure in the last few months to try to work something out with borrowers. Seems either they aren't trying to work things out, or borrowers aren't listening.
Based on lots of anecdotal evidence, I think its actually banks not willing or able to negotiate.
This is getting scary. Many of those on this board who are prudent and have savings are now tied at the hip to these defaulting loans -- more accurately -- our savings have been loaned out to deadbeats for years.
Since we have some time before the magnitude 9.0+ event, what should we do with savings? What is the best store of value going forward? Treasuries / Gold / Oil / Corporate bonds?
In a truly nightmarish scenario where we hyperinflate, would we all look back to today and wish we'd bought all the real estate we could?
I would like to hear from the board -- where do you have your savings parked?
Clearly housing has reached a bottom .....
..... bottom of the 3rd in my estimation.
"I think its actually banks not willing or able to negotiate."
And why would they?
All that pent up demand ensures housing will recover in the second half of 2008.
In know a few people who have been trying to foreclose since last fall and they still have not rid themselves of their homes. There seems to be a bottleneck in the system (legal/financial). I think a lot of these foreclosures are from spring/summer 07. The Fall Winter foreclosures are just starting to show up on radar.
"..... bottom of the 3rd in my estimation."
I agree or top of the forth. The next gov't bailout will come during the Seventh inning stretch
CR,
Is it possible to get a historical chart showing the yearly number of foreclosures nationally?
I would like to hear from the board -- where do you have your savings parked?
I really liked the idea to stock up on forever stamps.
I've also heard hoarding toilet paper and cigarettes, to dispense for a fee when times are really tough.
CR -- there is a lot of news today, but so far it's terribly depressing. Think you could throw a few jokes into your posts to lighten things up?
This is a re-post from the prior thread...sorry but things are moving fast today, and I thought this should be seen, since many seem to think the Bay Area is immune:
From today's San Jose Mercury News, we see that one (of many) condo project is coming online, and will not help inventory levels one bit:
Home - San Jose Mercury News...? nclick_check=1
"Affordable Condo Project in San Jose Fails to Attact Buyers"
The last two paragraphs of this article are kinda sad and kinda funny:
Amy Flores, who paid $590,000 for her three-bedroom condo late last year, is the lone homeowner at Villa Almendra. She's hoping the non-profit's efforts to sell other units pays off.
"It would be nice to have neighbors," she said.
Isn't this dramatic increase in notices of default a better predictor for future over-all inventory levels than just watching inventory alone?
It would seem that increases in foreclosure will necessarily lead to rises in over-all inventory since the downward pressure on prices (which foreclosures bring to the market) make it increasingly difficult for existing home-owners to sell.
Thus, if days on market increase as the number of foreclosures rise, then inventory levels will also rise as well.
By the way, I would have to assume that the percentage of California home-owners who have little or no equity must be increasing since the NODs are rising. After all, people who have equity wouldn't wind up in foreclosure in the first place since they could always just sell.
NOD filings have not kept pace with actuals. The rub here is that the banks (in there neverending scheme to delay actaul losses) are just not filing them at the rate they should be. Case in point a client of my wife's has been trying to buy a house from a bank that, based in it's own lack of information (and no NOD) is "just not ready"....this has gone on for over three months.
Wouldn't want to take a loss but they are willing to hold on to it forever??
Absolute madness...
Ciao
MS
I spot a tend!
And prices are still too high. Look out below!
Angry Saver, unfortunately the companies that track the data nationally are fairly new at publishing data (like RealtyTrac). DataQuick has been around for some time.
I'll see what I can find - but it probably will only be for the last few years.
Best Wishes.
Let's see: if the rate of NODS only held steady for Q1 in California, that'd be over 450,000 NODs for the year. And if at least half of those defaulted, as CR says, we're talking in the neighborhood of 250,000 foreclosures in California for FY08, rock bottom estimate.
That's, uh, breathtaking.
After all, people who have equity wouldn't wind up in foreclosure in the first place since they could always just sell.
Here's the situation as I understand it: Market prices are down, and likely still falling. That's because lenders have lost so much money that they have cut way back on lending, meaning that many people who would once have been able to get a loan are now being asked for 20 percent downpayments they don't have. So there's less demand, pushing prices down further and vaporizing the "equity" people thought they had.
A lot of the anecdotal stuff we've read here and elsewhere seem to involve homebuyers who thought of their equity as if it were a bank CD--"I put that money into the house. Now why won't they let me take it out again?"
The most amazing thing to me is the level of bad news resistance among FBs trying to sell. In my neck of the woods (East Bay, NCAL), they are still demanding near-peak wishing prices, as though the bubble is going full-steam ahead. Any offer even close to reasonable is blithely dismissed with a smirk.
Between ever-deepening negative equity and a rapidly slowing economy I don't see how the NOT/NOD ratio can do anything but get worse. Who, facing economic trouble in a risky economy, will knock themselves out financially to save a house that's 20% underwater and falling? The only thing that might help is an increase in short sales - foreclosure light, basically.
Sniglet, yes, this is part of the reason existing home inventory isn't the only indicator of supply (this chart gives us a feel for distressed inventory - and these properties tend to push down prices more).
MS, I think you are correct. The lenders are swamped, and are probably late on filing NODs. But even the data we have is stunning. Remember when that 2007 spike was impressive?
2008 is going to off the charts (OK, I'll just expand the chart).
Best to all.
Based on my research of the last San Diego real estate downturn, prices begin rising 30 months after defaults peaked.
We have some time to go before defaults will peak, it seems to me.
I say we are at the top of the 2nd inning.
Mr. Beach: gold in a private bank in Switzerland.
CR: there is no honor lost in moving from the mild recession camp to the deep, dark depression camp. You are welcome here! Jas, tj, and I will prepare a place for you, just in case.
And, please bring T-!
That's nuts.
jg, ROFLOL. Long term readers know I change my mind sometimes, but very slowly. If I join you, I'll definitely let you know!
Best Wishes.
jg - have you chosen a bank from your list you posted before?
CR,
Do you think that increases in NODs, and subsequent foreclosures, lead to rises in over-all inventory? In other words, if we see NODs increase, does that necessarily mean that the inventory numbers will increase (in proportion to the increase in NODs) later on down the road?
If NODs and foreclosures are hitting all-time highs, and much higher than previous early 90's peak, will someone please 'splain to me why virtually all of the (many) houses for sale in NCAL are still asking at 250-300x monthly rents and 10x area HH incomes?
Exactly how much good money do these floppers have left to throw after bad? The stubborn arrogance and level of denial is truly breathtaking.
HARM,
I know it is hard to be patient but like I was telling you a few years ago there are as many fools on the backside as on the front they need to clear out. Best too because they are catching the dirtiest knives. By Q4 '09 earliest there will be flawless properties and no buyers. And like you said when inflation and price declines meet somewhere around 120x - 140x rents then there will be opportunity.
It took what? Three years? for my theory that there would not be stickiness this time to come true. Wait for it, 120x will come.
the actual filing to foreclosure rate is about 5:1
Dataquick forecasting that all 4 quarters will be the same is stupid. Just as stupid as forecasting it will grow at the same increasing rate.
Lets see their quarterly data!
"CR: there is no honor lost in moving from the mild recession camp to the deep, dark depression camp. You are welcome here! Jas, tj, and I will prepare a place for you, just in case."
No way unless he does the 3 am - 6 am guard watch duty! And no pets other than dogs allowed!
Maybe the bulls think this chart is going to form a "V" top like the SP500's V bottom?
Politicians will be getting a pasting from lenders with charts like this one... and we're going to get some taxpayer funded help... that should launch oil to $200 and send the dollah parity with the peso.
Harm's statement about houses being 10x income in CA just blows my mind.
Borrowers & lenders lost their minds!
NNJ just outside NYC is about 5X income and I thought that was insane.
CR,
Not to worry. As you journey from the light of amber into the dark of shadow you shall pass through my realm of perpetual twilight. You are welcome to rest here and reevaluate whether the rest of the journey is truly necessary. HARM will provide the t-shirts and I the BBQ.
I have to say that after preparing a number of real estate agent tax returns this year the evidence is pretty strong that real estate agents don't know much about real estate!!
CR-
I'll go along with the swamped part however I do not believe that is the sole reason for not filing them. Filing them triggers......ahem..."Price discovery"...and we all know how unpopular that is. Heck people are still confused with the terms "write down" and "write-offs", the latter being something that has not happened at all.
banks have not written down anything...a wonderful parable to the homeowners who still think it's '05
Ciao
MS
w, I have not. I'm waiting until the stock market crash. Then, I will submit my application to the 'SafeWealth' folks, who will direct me to the two banks that they think are safest.
Do you have any thoughts on which one to go with?
Bob Dobbs: "And if at least half of those defaulted, as CR says, we're talking in the neighborhood of 250,000 foreclosures in California for FY08, rock bottom estimate."
Forgive my ignorance, but will this be a record?
CR,
Thanks for the informative post.
"For 2008, the NODs was estimated at 4 times the Q1 rate."
Is this not conservative. I would think with prices plummeting NODs would continue up on an exponential curve. Would it be possible to show monthly NODs for the past few years?
"DataQuick reports that, of the homeowners in default, "an estimated 32 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 52 percent.:"
California foreclosure "surge": Up 327% from '07 levels | L.A. Land | Los Angeles Times
More going into foreclosure and less likely to get out.
Bloomberg shows oil over $119/bbl. OUCH!
HARM: I have been closely watching the Stockton market at the micro-level for the last year and a half. One fascinating part of the price changes was the apparent stubbornness of sellers to drop prices for the first year or so. Price peaked in the last quarter of 2005 and almost revisited the peak in mid 2006. From the middle of 2006 to the middle of 2007 prices were down barely 5 percent to 10 percent. It appeared in July 2007 that we had a gentle landing.
Unfortunately for the sellers the floodgates opened around then and foreclosures and REOs hit the markets. Banks started cutting prices at an unbelievable rate of almost 5% a month. Around November last year I realized that a drop of 5% a month was unsustainable and would not continue for two years. In one year price falls at 5% a month would be 46% lower when compounded monthly. In two years they would be down about 70% compounded monthly.
By February 2008 the market had changed. The number of homes sold in 2007 were the lowest in a decade even as Stockton was much larger than it had been in the 1990s. However in February 2008 sales rose significantly and exceeded the level in February 2007. This pattern was repeated in March. Prices had fallen significantly (40% to 50%) from the peak and mortgage payments were comparable to rents for the same house attracting both renters buying their first house as well as investors.
Similar market dynamics are coming to an area near you.
"Mr. Beach: gold in a private bank in Switzerland."
And how do you know that those pesky Swiss bankers do not gamble with their "precious" and vast collections of Jewish gold teeth in CDO and other derivatives markets? Well, THEY DO ACTUALLY AND THEY LOST!
So the safest place to put your money now are...NET CASINOS AND POKER SITES. I mean they do not GAMBLE WITH CUSTOMER'S MONEY...
Gold in a Swiss Bank? - you then have to report world-wide assets and be taxed on the gain.
Also recall that in 1932-1938 it was the law that if you wanted to open your safe deposite box, the Bank was required to have an IRS there in person while it was being opened.
I think we need an emergency fed funds rate increase.
Seriously. Yoy CPI inflation is over 4% and yoy PPI inflation is over 6%. Add to that soaring commodity prices and it's the late 1970s all over again.
jg - I wouldn't have any idea which to choose. But I am thinking along the same lines to move quickly if markets collapse.
Angry Saver - The Feds first priority is to maintain/increase employment and economic activity. Second is inflation.
By the way, if CR's chart is correct we would have more homes in default than sold in 2008, has that ever happened?
Barley - Good points. but, I would gladly pay taxes on gains if my goal is preservation of savings. As to safe deposit boxes, they are much safer than keeping gold on hand. There will be time to get assets out if markets collapse.
Barely,
How are soaring prices going to maintain/increase employment & economic activity?
Barely, per 'Swiss Money Secrets' (Robert Bauman of The Sovereign Society) page 56: 'Valuables...purchased outside the U.S. and placed directly into a non-U.S....private security vault do not appear to constitute a foreign account..."
Keep gold in the safest vault/bank in Switzerland, and wire proceeds stateside as needed. That's my plan.
Must be the effect of You Walk Away
Angry Saver - You have a point but it is irrelvant.
jg - I think the IRS might say differently.
Best way is to set up an offshore business invesment account. You can do this for about 2k and a legal beagle will charge you 'bout $1200/year to service the account. You can not be the benificial owner of the account; but you can consult to the company, for a fee. Suggest Turks.
DQ story is up:
DQNews - Foreclosures Press Release
jg - here is some reading:
Turks & Caicos Banking Company - Offshore Banking In Turks & Caicos, Corporate Turks & Caicos Banking, Private Investment Banking
RThomas, I noted this graph was probably conservative for 2008. The data is only available quarterly - this should give a feel for the rocket ship (opposite of cliff diving!):
DataQuick reported NODs by quarter
2005Q3\t12,606
2005Q4\t15,196
2006Q1\t18,856
2006Q2\t20,909
2006Q3\t27,218
2006Q4\t37,994
2007Q1\t46,760
2007Q2\t53,943
2007Q3\t72,571
2007Q4\t81,550
2008Q1\t113,676
Best Wishes
while greedy americans are all worked up with the housing news, is anyone here watching EUR/USD go past $1.60 ?
EUR/USD has been a good return investment
Can't we just take California and hide it in an off balance sheet somewhere?
And Florida, and Nevada.
B-, thanks for the counsel.
I don't care what the IRS says. Holding gold itself is going to be illegal, again.
I'm taking the Joseph Kennedy approach: my money is mine, it is overseas, and the government ain't touching it.
My 2008 tax bill will include a large transaction taxed at 52%. I've paid rather my share, already.
Um...wow? Yeah, definitely wow. Thanks, CR. My head asplode now.
How can this NOT end in a long and deep recession???
NSRGY.PK = lama's Swiss Gold
WOW - Thanks Cal
"Lending institutions sent homeowners 113,676 default notices during the January-to-March"
"On primary mortgages, California homeowners were a median five months behind on their payments when the lender started the default process. The borrowers owed a median $11,474 on a median $346,750 mortgage"
For Estimating purposes:
$346,750 x 113,676 =
$42,827,433,000.00
And for fun lets take a peak at the annualized num:
$171,309,732,000.00
No lender will hire more people (cost) in order to quickly finish the foreclosure process (loss).
Now these last figures are based on 1st quarter results (annualized). Things are beginning to pick up steam now.
How is the REAL graph going to look like at the end of the year?
"median five months behind"
The August crunch is starting to show up in the numbers.
Makes sense, Cal.
Yep, these things take time.
I just wish the d*** stock market crash would happen so that I could get on with my life!
64k homes sold in California in Q1 according to DQ.
Trustee sales in Q1.. 47k.
Now think of the number of short sales.
The banks are getting the money.. the homeowners aren't. The move up market is going to be destroyed for quite some time.
The first 3 months of 2008 were just horrible for consumer sentiment. Wonder how many threw in their flag. They won't be reported for a while.
"How can this NOT end in a long and deep recession???"
I'm in the camp of "IT CAN'T"
OT:
With the market off 140 points or so is it me or are there alot more "hot stocks" PR releases today than normal. On one stock I count 2 normal PR happenings.......they also have over 41 "Hot Stocks" along with it....
Someone getting a bit antsy to unload???
Ciao
MS
Mr. Beach at 108 pm
you asked what some of us here are doing about savings...preparations for financial crisis...
my bet is safe, liquid, available, government insured, backed by the full faith and credit (ha) of the printing presses in the basement of the treasury)
liquid cause at some point you have to move your money in response to inflation...remember interest rates a la early 1980s (double digits!!!)
safe , cause no amount of return on risk, in these circumstances, is worth the possibility that you could loose most of your capital.
therefore since i am not smart enough to play the short game nor the futures game...
i have placed my money in ncua and fdic insured bank accounts...currently earning 4.5 to 5.5 percent interest (Certs of deposit)...
large cash position, some of which is NOT at home AND NOT in a bank, (yeah ok you guess where) ( no, not in a bank savings box)
tangible things of tradeable value...coins etc
rural land my wife and i own outright, no loan nor lien... and i am now doubling the size of my garden (was big to begin with, now approaching one acre, (200 by 200 feet) under the tiller)
i know... i known...all you real farmers are laughing, one acre is a pittance but my wife and kids and i work this land with a rake shovel and a beat up old sears 5 hourse roto-tiller.
finally, some short term, GENERAL OBLIGATION municipal bonds, that are backed by the State (good state that, for the time at least, appears to be one of the 5 that have fully funded their pensions and budgets and currently run a surplus.
i am not telling you to do this...i'm a risk aversive person, and a turtle of an investor...(and i'm a pretender)
I really liked the idea to stock up on forever stamps.
Man if they had a forever stamp ETF I'd be all over it.
My quick estimates make for about 600k plus defaults this year and at a rising NOD-->Foreclosure rate, at least 350k foreclosures. Scary Stuff.
Does anyone know where we are approximately with the California option arm resets? When does the big surge start? Granted some could be defaulting before reset, but I think the real pain is yet to come, right?
doom - Great idea:
Current Level III States are CA, AZ, FL
OK does anyone else want to see that chart overlayed with the Case-Shiller?
Things are not getting any better based on the NOD's in the first weeks of April. REcord #'s in my Ca County
Geoff,
2003 was when the option ARM was unleased on the masses in California for purchases. For Refi it was earlier than that. So about 5 years after that.
I've been wondering for years how people could believe that this housing bust wouldn't be worse than the dot-bomb bust.
Americans are getting poorer. We're just past the denial phase and entering the terror phase. These busts take time.
oh yeah...mr beach...one more thing about preparing for possible...likely hard times ahead...
one case of my favorite, cheap but drinkable scotch whiskey...buried somewhere in the back forty acres.
w "But I am thinking along the same lines to move quickly"
The lines seem to be moving quickly on Wall St, to the exits today. They are leaving some of their winnings in my TWM, as evidence.
Thx Cal, that sounds about right, but if I recall, there wasnt that much option arm activity until prices became unreachable any other way, and I think that wasnt at the start of 03..maybe a year later. So, it should be sometime around the end of the year maybe when the fit really hits the shan. This will basically be the cause of the W morph to L shaped recession I envision. The mid year bump is going to end up ending in disappointment.
Geoff here is a collection of different charts, some of them break out the option arm reset:
bubbleinfo.com » Page not found
But people might hit various caps before then.
Geoff, you're right. It wasn't till 04 and through 05 that the Option Arm was at it's peak.
Add 5 years for the blowup and we have 2009, 2010.
How about all the interest only's. Many were 10 years, but a good amount of 5 years to coinside with the OA's.
Yep, bottom of the 3rd, maybe top of the 4th.
OT...but since l just read last night's comments of the price of rice, etc, check out this rather shocking item from Tyler Cowen:
"In Haiti, where three-quarters of the population earns less than $2 a day and one in five children is chronically malnourished, the one business booming amid all the gloom is the selling of patties made of mud, oil and sugar, typically consumed only by the most destitute.
Its salty and it has butter and you dont know youre eating dirt, said Olwich Louis Jeune, 24, who has taken to eating them more often in recent months. It makes your stomach quiet down.
Marginal Revolution: The countercyclical asset
This definitely tops Huckabee's squirrel comments:
"When I was in college we used to take a popcorn popper, 'cause that was the only thing that they'd let us use in the dorms, and we would fry squirrel in popcorn poppers in my dorm room." -- Mike Huckabee
Based on info I've seen here and my memory the Option ARM's started ramping up resets in March 2008 and would be going strong for at least a year.
However, Tanta at one point explained that some of those people were already defaulting because they had reached their neg am cap. However, my memory says that this was a small percentage of the overall wave that is breaking right now.
I think there is a lot of junk that hits in 2010, too. But then those people will probably have already walked away by then.
If Ben cuts rates, some CEOs may be joining the pitchfork brigade.
United Airlines is down down 35%.
Delta's CEO said that aircarriers would need to raise fares 15-20% just to break even.
Yahoo! 404 - Page Not Found
"i know... i known...all you real farmers are laughing, one acre is a pittance but my wife and kids and i work this land with a rake shovel and a beat up old sears 5 hourse roto-tiller."
Mock, the civilized alternative for those of us who don't want to get our hands dirty is a CSA farmer -- community supported agriculture, the sort of operation where the farmer plants a variety of produce, sells "shares," and you pick up your bundle of goodies once a week. Not so good for city dwellers maybe, but fine for those on the edge of the country.
I get mine from the organic farm on the local university: $400 a year for more fruit and veggies than my wife and I can eat, 5-6 months out of the year. Including blueberries (yum) and kale (not so yum). But I have learned to love collards.
And come the "inevitable" collapse of civilization, I know that my food source will be defended by bands of granola-fed pitchfork-wielding hobbits.
"I think there is a lot of junk that hits in 2010, too. But then those people will probably have already walked away by then."
12th Percentile
I don't know about that. Where will you go to find something comparable when your paying a BS rate of 1%. It's cheaper than renting.
I think many will wait till doomsday. When they hit therir 115% or whatever their contract calls for.
It's one thing to talk about a "bottom" in housing, but talk of a "recovery" is just silly. I see housing returning to the 3x income range. The only question is how long it will take.
Until median incomes start to increase (not likely any time soon), how can anybody expect housing to "recover." Personally, I think we will never again see houses at 5-10x hh income.
Option arms are not defaulting at the rate of subprime YET because these borrowers can still afford the payments. They may be underwater, but heck, nothing is cheaper out there. They are still paying the autoficially low housing payments.
Did I say top of the 3rd? Make that top of the 2nd.
Thanks, Ben, you schmuck.
UAL Corporation Share Price Chart | UAUA - Yahoo! Finance
I think many will wait till doomsday. When they hit their 115% or whatever their contract calls for.--
doom
Unfortunately for them, doom, their credit cards will have maxed out before then. They will stop paying well before the "115% or whatever" and will be out of the house 12 months later. During that 12 months, they will get divorced and will try to sell lots of boats and country club memberships.
Outsider writes:
CR -- there is a lot of news today, but so far it's terribly depressing. Think you could throw a few jokes into your posts to lighten things up?
Here's one for you:
http://www.realtor.org/pac.nsf/files/Home_Values_Print_Small.pdf/$FILE/Home_Values_Print_Small.pdf
Best. Chairman. Ever.
May Crude
"I see housing returning to the 3x income range."
Yep, It's the ONLY way.
UNLESS.....
We bring back all the crazy programs that got us into this mess to begin with.
Ok, heres the over and under: Do 2Q NOD's exceed the apx 155K for the full year of 96 (attempt to read level off the chart), the highest full year in the series prior to 07?
"i know... i known...all you real farmers are laughing, one acre is a pittance but my wife and kids and i work this land with a rake shovel and a beat up old sears 5 hourse roto-tiller."
Since nearly everybody will be concentrating on growing food stuff, why not concentrated on something else, like growing marihuana?
Much more better yield and those wanna-be farmers will wanna trade some of their stuff for some "good time"
Crude closes at new record of $119.37 a barrel
Bob, may I suggest Kale cooked lightly with a little minced garlic in olive oil and tossed with pine nuts and feta cheese.
ac - I saw that! We really are in a tough spot.
Thanks, Ben, you schmuck.
Only if you're holding airline stocks jg. I think the more interesting thing is the inflation words from the ECB. Yes, they will keep inflation low by causing all exports to pretty much screech to a stop if they raise rates. I don't care what they say, they are going to lower before the end of the year, as they will have no choice if the Euro goes any higher. I suppose having inflation under control is great, but not so great if your industries are laying off, and your exports fall off a cliff along with tourism.
Just an anecdote, but it appears that 'analysts' may be waking up:
Art Hogan, chief market analyst at Jefferies & Co.: "We're in a day-to-day assessment of how good earnings season is, and right now there's more bad news than good news the parade has been less positive than we've anticipated."
Yahoo! 404 - Page Not Found
ac - I saw that! We really are in a tough spot.
It's a repeat of the 1927 rate cuts. And 1998. And 2001.
Why can't they learn?
Just a reminder:
(Ambac) announced that it will host a conference call for investors on April 23 at 11 a.m. Eastern to discuss first quarter 2008 earnings which are scheduled to be released at 6 a.m. that morning. The dial in number for the call is 877-407-0782 (U.S.) and 201-689-8567 (outside the U.S.).
Makes sense, i-.
The Euro will disappear next year, at the latest, given the tug between German inflation fighting and French/Italian/Spanish prime-pumping.
Daily Kos: An Alarming Forecast For The Housing Bust
The housing bust party is just getting started. Alt. A is next on the hit (or *hit) list. With the NOD/FC backlog, IMHO, it won't start to show up in the stats for at least another year. The NOD/FC business will proceed slowly in a deliberate manner to spread the write down pain over as many quarters as possible to try to keep the SS Minnow afloat.
We should set up a CR trading post. I've got black olives, Bacon varietal avocados, heirloom tomatoes and three types of limes. Need chips and tequila. Viva la revolution.
I've got three bags of Costco rice.
☺☺Mr. Beach writes:
"This is getting scary. Many of those on this board who are prudent and have savings are now tied at the hip to these defaulting loans -- more accurately -- our savings have been loaned out to deadbeats for years.
"Since we have some time before the magnitude 9.0+ event, what should we do with savings? What is the best store of value going forward? Treasuries / Gold / Oil / Corporate bonds?
"In a truly nightmarish scenario where we hyperinflate, would we all look back to today and wish we'd bought all the real estate we could?
"I would like to hear from the board -- where do you have your savings parked?"
"And let no state suppose that it can choose sides with complete safety. Indeed, it had better recognize that it will always have to choose between risks, for that is the order of things. We never flee one peril without falling into another. Prudence lies in knowing how to distinguish between degrees of danger and in choosing the least danger as the best."
RE as a hedge against inflation would make sense...
If it wasn't falling so darn fast....
I prefer brandywine or german johnson tomato's. I can dig up some Patron and chips.
Got salsa?
It's a repeat of the 1927 rate cuts. And 1998. And 2001. Why can't they learn?
How so ac? Everyone on here ranted and raved that the Fed was going to cut to zero...you'll see! And I said, um no 2% will the the lowest and caught a lot of flack. Let's see what they do at this meeting because, I say "no cut for you!". Or if they do, it's .25 and that's it. But I'll go out on a limb with no cut.
I do believe I even bet a couple of posters on here that 2% would be the limit.
"Wow, now 2/3 of NODs are going to foreclosure!"
Bullish! We are closer to the top, since there can't be more than 3/3s
jg writes:
I've got three bags of Costco rice.,/i>
You must have got out before they started rationing. I'd bet half this audience is too young to remember rationing of any kind says the geezer who remembers filling up the family 32 gallon Chevy Suburban for $0.289 per.
barely writes:
"Wow, now 2/3 of NODs are going to foreclosure!"
Bullish! We are closer to the top, since there can't be more than 3/3s
¡Mais non! This is not doubleplus truthiness. I fully expect the number of foreclosures to exceed the number of NODs when eventually all the off balance sheet defaults are forced back onto the books.
"w writes:
Bob, may I suggest Kale cooked lightly with a little minced garlic in olive oil and tossed with pine nuts and feta cheese."
Thanks, appreciated. My Portuguese mother put kale in her home-made soups and cooked it to death. Nothing turns to slime like overcooked kale. The scars on my psyche last to this day. But I'm trying to get over my prejudice.
How so ac? Everyone on here ranted and raved that the Fed was going to cut to zero...you'll see! And I said, um no 2% will the the lowest and caught a lot of flack. Let's see what they do at this meeting because, I say "no cut for you!". Or if they do, it's .25 and that's it. But I'll go out on a limb with no cut.
Well I ranted and raved a year ago that if they cut rates at all we'd just get more bubbles.
Again, according to my reading in the 1920s the Fed was stymied by unrelenting bubbles even once they began taking aggressive anti-bubble actions.
To have any chance you've got to treat these speculators like vampires and take them out while they're still puppies.
I remember rationing of Tickle-me-Elmo. Does that count?
Bullish! We are closer to the top, since there can't be more than 3/3s
You know, I'm a right-coast person and i have no idea what metric the foreclosure top-line number relates to. Given the size of CA, the foreclosure rate represents how many of the housing stock? What percentage of mortgaged residences? How do these metrics compare against other states? Is CA an anomoly compared to other states, or is it fairly representative? I know those types of loans weren't nearly as popular here, and the housing stock is mostly not new. I'm just trying to understand the CA perspective on this and how it relates to the economy as a whole.
Record setting GALORE!
CA foreclosures, OIL, EUR/USD, grain complex exploding... So what's not to like, Ben? Good job!
Enjoy your well deserved fame. The US public adores you. WHat more do you have to unleash?
w writes:
I remember rationing of Tickle-me-Elmo. Does that count?
Only if you are talking about the Mandarin spoeaking model assembled by hand for pennies in sweatshops near Buffalo by displaced out of work mortgage brokers for the burgeoning Chinese export market circa 2012.
--
The BIG ONE: 8.5 Richter Financial Earthquake In California
Since the credit crisis began in August 2007 home prices (on price per sq ft basis) are steadily dropping at 20-40% annual rates depending upon the area. There could be some leveling off in prices for few months before the second leg down takes prices down more than 50% from the peak in most areas by the year-end. CA has been in recession since July 2007 (based on employment data) and should enter depression in 2009.
Jas
Where is the PPT today?
I would like to hear from the board -- where do you have your savings parked?
I keep my savings in tightly packed condoms and I shove them up my ass for safe keeping...best safe there ever was.
The homes under 300k in my local town (Simi) match the same number of homes under 500k during the same month in 2006.
The problem with ALL option arms is that they NEED to be refinanced. Almost every single one of these loans will be looking at HIGHER loan amount and a LOWER property value.
Imagine you got a 500k option arm in July 2005. When you refinanced your home was valued at 625k, putting you at a reasonable 80% loan-to-value. You'll most likely reach 550k prior to July of 2008 (550k is 110% of the original balance.)
Your home value may have gone up after the refi but is now back down to 600k. Now you are f*cked to put it nicely. you are at 92% Loan-to-value, and no one will touch your loan. You'd be lucky to get a 5 year IO @ 7.75%.
It doesn't matter if you stay in the loan you are in or magically get a refi. You'll still be paying a fully amortized (principal and interest payment) of over 3,900 a month, when your minimum payment option was only 1,835 a month.
Destruction is coming. Please do not underestimate it. Plan accordingly.
ipodius, real estate speculation is part of the CA psyche. Just like Beach Boys and earthquakes. Something like 1 in 50 adult Californians is a realtor. Probably just as many worked for mortgage brokers. In coastal Southern CA they are even more concentrated. Maybe 1 in 10 married couples has at least 1 spouse working in real estate. Just as many in construction. They smoked their own supply.
Bob Dobbs said: "Thanks, appreciated. My Portuguese mother put kale in her home-made soups...."
You had a Portuguese mother? Lucky devil!
My mother was an old fashioned boil it to death with fatback Southerner.
I keep my savings in tightly packed condoms and I shove them up my ass for safe keeping...best safe there ever was.
borkafatty
No room there. Got my gold watch and my great granfather's Colt 45 in my ass. Any other suggestions?
CNBC mantra - "We think it's going to be a short and shallow recession. Time to buy ahead of the news"
pssst... (code words for they're selling)
Same chumps that said - "No recession. Slight pullback, mid-cycle-slowdown and then it's off to the races".
Dangerous to listen to lying-sack-o-shit bulls in a bear market.
To have any chance you've got to treat these speculators like vampires and take them out while they're still puppies.
but i wonder ac, at what cost? if the rates were still high, what do you think would have been the effect on the economy on the whole? do you think that unemployment would have rocketed because the dollar would still have been high and exports would not have grown? is it better to get the speculators out even if it means high unemployment(the Fed's first mandate)?
There are no actions without consequences, and i'm wondering if you think the consequences of a higher interest rate would benefit the maximum number of people more than a lower rate.
My option arm anecdote.. someone I know (who also happens to be a realtor) has an option arm on his home.. he was paying the minimum on it.
Not too exciting of a story you say?
Well he was using draws off a HELOC to pay the minimum payment on his option arm. He tried to get a larger HELOC late last year and was denied.
Well he was using draws off a HELOC to pay the minimum payment on his option arm. He tried to get a larger HELOC late last year and was denied.
I love it when the Ponzi shell game ends by the shell owner coming around to take back his shells.
☺☺barely writes:
"CNBC mantra - 'We think it's going to be a short and shallow recession. Time to buy ahead of the news' "
"As the enemy drew nearer Moscow, instead of the Muscovites' view of their situation growing more serious, it became more frivolous, as is always the case with people who see a great danger approaching. At the threat of danger there are always two voices that speak with equal power in the human soul: one quite reasonably tells a man to consider the nature of the danger and the means of averting it; the other, still more reasonably, says that it is too depressing and painful to think of the danger, since it is not in man's power to forsee everything and escape from the general march of events, and it is therefore better to disregard what is painful 'till it comes, and to think about what is pleasant."--Leo Tolstoy, "War and Peace"
No room there. Got my gold watch and my great granfather's Colt 45 in my ass. Any other suggestions?
I'm reminded of my grandfather..he used to say "he's so cheap he could squeeze a nickel out of a buffalo's ass".
Just remember to fish them out when you take a dump. literally your savings will be in the toilet!
Cal writes:
The homes under 300k in my local town (Simi) match the same number of homes under 500k during the same month in 2006.
It is a stretch to call a sub $300k dwelling unit in Simi a "home." Here's one: - real estate - REALTOR.com®
"No room there. Got my gold watch and my great granfather's Colt 45 in my ass. Any other suggestions?"
Large Hadron (not Hardon) Collider will soon start spinning in Switzerland and it just might create mini black holes...that kind of safe beats even real tight assholes.
Down south
Good quote.
Perspective from a glod bug.
Apr 22, 2008 Tucson & The Great Depression Darryl Robert Schoon 321gold ...inc ...s
There are no actions without consequences, and i'm wondering if you think the consequences of a higher interest rate would benefit the maximum number of people more than a lower rate.
ipodius: you bring up a very good and reasonable question. for which I have no idea.
however I will tell you this, as far as I can tell, the massive amounts of rate cuts have really only bolstered the financial houses and allowed them to hide their losses and keep their huge paychecks.
yet little to nothing "trickles" down to the masses.
as always, they get the money first.
instead, we are seeing significant asset price appreciation likely as a hedge against this policy of rate cuts.
thus I must ask myself:
instead of bailing out Bear and dropping rates, would it have been simply better to force cramdowns and bail out all the underwater homeowners instead?
it would seem that all the PRODUCTIVE things being done are being done on behalf of big business and the big banks, who have clearly shown how un-deserving they are of the help.
Dawg, Nice chain-link fence in those photos! Missing the razor-wire though. Turn it in to $$$$ at the recyler, to pay the optionARM minimum?
End game is approaching.
Rob..
While true.. the homes available in April of 2006 in the sub 500k range were of the same quality.
Yearning, I sort of agree that the Fed had some things in mind when they lowered the rate...one was to increase the spread so that banks could stabilize, another was that they knew loans were re-setting, and this gave people a change to re-fi at a more attractive rate. another by product was the dropping dollar, which i think they gambled would boost exports and help manufacturing here, hence keeping their first mandate.
in my mind this was nothing, and the real rubber meets the road now. if they stand pat and then start the increases in the summer or fall, it means that a lot of these pricing pressures are temporary and they were right if oil and commodities are broken, as core inflation will remain the same but headline will drop. the dollar will also rebound. so i'm interested to see what they do now, and as usual, i think it is way too early in this cycle to call what they are doing right or wrong. we'll know by the summer.
Doom: I/Os were huge in CA (much more so than Option ARMs), and that is true here in OC (I believe that in 2006, approximately 40-45% of purchase loans were I/O in OC). They have varying terms before recasting, but many were 5 years. Those folks are going to be defaulting in huge numbers as they will not be able to afford the PITI payment and will not be able to refi.
Dirk: I'll take the under. I think we'll get close in 2Q, but I think it will be 3Q before we surpass the 1996 full year total for NODs. My guess is based mainly on the fact that lenders are just too swamped to actually get around to filing all of the NODs that they should (see the note in the DQ report that borrowers were 5 months behind on 1st mortgage when NOD filed, and 8 months behind on HELOC when NOD filed).
Time to play: Name that Fed Chairman!!!
Submissions:
One-hundered-a-barrel Ben
Over-the-barrel Ben
Oil Barrel Ben
Barrels-of-fun Ben
Hundred-bucks-a-barrel Bun
Cien Barrel Ben
So far I've been unable to get one that really 'sings'. Maybe he'll solve my problem with the next rate cut and it'll be 'Two-hundred a barrel Ben'.
Cal,
So right. My favorite canary in the coal mine of SoCal is Wrightwood 92397. 18 months inventory, most still over $300/sf for shacks.
Ben Dover.
BailoutBe
I do believe I even bet a couple of posters on here that 2% would be the limit.
ipodius
lets cut out the bragging. u also said commodities, oil and gold specifically, were done as well. oil at $120 and gold at $920?
"Where is the PPT today?"
Buying oil, Shrubs last year in office got to make sure his buddies get to cash in.
Weird Uncle Ben
Bent Penny Benny
Benny Two-Yen (what the dollar will be worth)
Pope Benjamin the Diluter
St. Benjamin, Defender of Wall Street
CR,
Thanks for the quarterly NODs. Scary stuff for a Ca homeowner.
but i wonder ac, at what cost? if the rates were still high, what do you think would have been the effect on the economy on the whole? do you think that unemployment would have rocketed because the dollar would still have been high and exports would not have grown? is it better to get the speculators out even if it means high unemployment(the Fed's first mandate)?
Well I think high unemployment and deep economic contraction are the cost of curing bubbles. But I think once you have bubbles that price eventually has to be paid so the longer the bubbles continue, the worse the ultimate price.
"Well he was using draws off a HELOC to pay the minimum payment on his option arm. He tried to get a larger HELOC late last year and was denied.
Cal | Homepage | 04.22.08 - 3:23 pm | #"
Cal,
I mentioned it in another thread. A lady I work with that has a deadbeat husband realtor has been making the house payment THE EXACT SAME WAY.
Oh yea,this is gonna end well....
Chris
Cobradriver,
I was in NW FL recently. It was unbelievable how many for sale/rent signs I saw. Lots of "bank owned" signs also.
An incredible change from two years ago.
Bewildered Be
Ben "The Dick" Arnold.
Banzai Ben.
Whip Up Inflation Now Ben.
Uncle Ben's Perverted Price.
Ben ChWarrant.
Ben Ighted (overcome by darkness)
Ben Ignneglect
Benzimidazole (A crystalline compound, C7H6N2, that is used in organic synthesis and inhibits growth)
This is too easy.
One anecdote I saw on the broker board recently.. WAMU foreclosed on someone and then rented the house back to them.
A funny anecdote was someone hadn't made their payments for 2 years (bank apparently just gave up) and was trying to refinance. The broker was asking him how he thought he could get a lower payment than zero!
from WSJ "developments" blog:
Yales Shiller: U.S. Housing Slump May Exceed Great Depression:
Yale University economist Robert Shiller, pioneer of Standard & Poors/Case-Shiller home-price index, said theres a good chance housing prices will fall further than the 30% drop in the historic depression of the 1930s. Home prices nationwide already have dropped 15% since their peak in 2006, he said.
I think there is a scenario that they could be down substantially more, Mr. Shiller said during a speech at the New Haven Lawn Club.
Mr. Shiller, who admitted he has a reputation for being bearish, said real estate cycles typically take years to correct. Home prices rose about 85% from 1997 to 2006 adjusted for inflation, the biggest national housing boom in U.S. history, Mr. Shiller said. Basically were in uncharted territory, he said. It seems we have developed a speculative culture about housing that never existed on a national basis before. Many people became convinced that housing prices would increase 10% annually, a notion Mr. Shiller called crazy.
Mr. Shiller, who said its difficult to forecast prices, endorsed legislation proposed by Sen. Chris Dodd, (D., Conn.), and Rep. Barney Frank, (D., Mass.), that would allow the Federal Housing Administration to back as much as $300 billion in mortgages for struggling homeowners. Servicers would have to agree to take a loss on the existing loans, while borrowers would have to show they could afford to make new payments on their refinanced mortgages.
Permalink | Trackback URL: Yale’s Shiller: U.S. Housing Slump May Exceed Great Depression - Developments - WSJ
lets cut out the bragging. u also said commodities, oil and gold specifically, were done as well. oil at $120 and gold at $920?
who was it that point out what wednesday said in the addams family movie? why she dressed as if she were going to a funeral when no one died?
"wait"
After this Fed meeting and no cut, count to three and then look.
WOW that SIMI place is an S*&Thole- I was expecting bad but...- who were the fools paying $500K for this (and who would pay $300K for it?)?
BTW Manhattan (NY) is 20X HHI (plus $1k+ monthly's) - gotta fall hard and soon.
and idoc, when i said that, glod was over 1000.
ipodius @ 3:22 pm
Once again I agree with you. I once had a book called "economics in one easy lesson" -- got it for 50 cents at a used book fair.
The lesson was this -- always look for the unintended consequence because there will always be one or more. Higher tariffs to protect local industry and worker's jobs = higher costs to consumers. etc. etc. etc.
btw since I'm posting, how do you guys buy physical gold? I bought several 1/2 oz. "bars" back in the early to mid 1970's (when Bank of American here was still Continental Illinois) but I had to pay sales tax on them. Right now in Chicago the combined city, county, & state sales tax is 10%
Bob Dobb Nothing turns to slime like overcooked kale.
You've never gotten within spitting distance of okra, have you now? Maybe this is due to good planning, maybe to luck, if the kale scarred your psyche so severely.
As for those asking what the NOD numbers really mean:
Let's see - one way to look at this is most of those NODS (over 80%) are going to show up on the market as forced sales in some form or another. At 450K estimated NODs in 2008, that suggests about 350K forced sales arising due to those NODs. NAR gives CA existing home sales for all of 2007 as 355K. The conclusion has to be that the existing home market in most areas will be dominated by forced sales, and prices will plummet like a rock until those "specials" get cleared into the market.
Forget sticky RE prices! Not in CA. This is why I laughed so hard at Tanta's last GM sendup - the one about HELOC's. Poor Gretchen was two galaxies away from ours in that one.
You can get the NAR state data here.
On the brighter side, as the pricing corrects you will see a lot of FTHB/RTHO sales in CA. It's all about pricing. CA has a very low rate of homeownership compared to the national average, and a 30% fall in prices will abruptly make many would be homeowners into homeowners.
On the banking side, there are going to be a lot of failures. The bulk of second liens originated in recent years are getting wiped out and will have very little actual collateral value at the end of the year. If it were me, I'd be trying to negotiate seconds down to 20-50% already with a promissory note due on sale for the rest. Of course doing so would make everyone have to change all their loss forecasts and would promptly wipe out the capitalization of many banks, so no one's going to do that yet.
The affordable home problem in CA has largely been solved. See? That was easy!
HaloScan.com - Comments
"... How about that nice little turn in commodities and AU today? That ought to catch some by surprise.
It bears repeating: if you think what is playing out starts with an I then you'd better think again. It starts with a D. And it isn't depression, although if you are unprepared xanax may help with the results.
ipodius | 03.04.08 - 6:36 pm | #"
How was that again...?
tg,
From the story you linked to:
"Real estate mortgages, instead of being held on the books of local banks, were now packaged and sold by Wall Street investment banks to yield hungry buyers around the world, buyers who had no way of knowing that the payments on a $500,000 mortgage were to be made by a $9.00 per hour convenience store clerk who had been sold a don't ask don't tell no-money down adjustable-rate mortgage by a broker whose incentive was the considerable up-front fees collected at the time of sale made possible by the Fed's 1 % money."
I looked up "confidence trick" on Wikipedia and this seems to pretty much to fit the profile.
According to Wikipedia, the various protagonists in a confidence trick are:
1) The confidence trickster, con man, swindler, grifter, scam artist or con artist: In our case, this would be the banker.
2) The shills, who help manipulate the mark into accepting the con man's plan: In our case, this would be the rating agencies and the bond insurers.
3) The mark or griftee: In this case this would be the people who bought the various mortgage-backed securities.
But I have some questions:
An incredible change from two years ago.
Angry Saver | 04.22.08 - 3:57 pm | #
Angry,
And the local RE establishment is working like HELL to clean up the MLS and dumping non-competitive sellers. We are still at FC=Sales for like the seventh month in a row. March was actually decent from the snowbirds buying. Sarasota county is just starting to get rolling on the FC bandwagon. I haven't looked lately but Dec FC'c=Sales...
Oh and all ot(cept for me!)was cut last month. The claws have come out. I actually feel sorry for the people who don't need/want the ot that have to put up with the whiny bullshit...
I guess half the people I work with would be considered frugal/savers.
Chris
A funny anecdote was someone hadn't made their payments for 2 years (bank apparently just gave up) and was trying to refinance. The broker was asking him how he thought he could get a lower payment than zero!
"Saved By Zero." The Fixx, I think we have a theme song.
"Zero as a Limit." The Human League.
"Zero." Smashing Pumpkins.
Zero." Joan Armitrading.
"Too Low For Zero." Elton John.
But please, there is no question:
"Less Than Zero." Elvis Costello.
Right now in Chicago the combined city, county, & state sales tax is 10%
Ethan | 04.22.08 - 4:03 pm | #
Take the skyway and head down to around Crown Point or so (don't think you want to buy gold in Gary, it will not be in bars or coins, but in bling)
Mr. Beach - gold
Wow! All of this bad news is making hard on these kind of specul-morons...
Phoenix Couple Struggles to Hold On To Several Investment Properties - WSJ.com
Don't you just feel horrible for them?
Cobradriver,
A few properties I looked at were in foreclosure. They are being offered at 2/3 the price of identical non-foreclosure properties and still can't be sold.
The inventory is huge. At this point, people are hoping for a cat 5 hurricane.
Bob Dobbs
interesting idea about CSA shares in farming.
part reason why i do my own is exercise...i'm like peak oil...on the down hill side and activity is good.
also the sight of a gaggle of pitchfork wielding hobbits is my worst nightmare!!!
Cal | Homepage | 04.22.08 - 4:01 pm |
Cal,
Lady on mom and dads street. Quit making payments in late 04/early 05 from what I could tell. Bank made ZERO effort to get rid of her. She kept the place up and the power on. Finally last Dec she up and moved in with her daughter. House just went to FC in March. I figure she lived there almost three years with no payment.
Come to find out it was a HELOC that did her in. She actually only owed 55k on the place. Borrowed almost 250k against it. The value now?? Probably 140-150k. And falling.
Chris
alphaAlphaBeta
your idea about a cash crop ie mary jane would make sense if legal...i like to sleep at night.
but to quote eliot ness after the end of prohibition..
was asked whattaya gonna do now?
to which ness replied...i think i'll have a drink!
How was that again...?
again, wait. roubini was only off by almost three quarters. i'll be closer
borkafatty said,
I keep my savings in tightly packed condoms and I shove them up my ass for safe keeping...best safe there ever was.
borkafatty | 04.22.08 - 3:15 pm | #
mock says:
i laughed so hard i shit my gold and silver right out my ass!!
I definitely think the demise of HELOC is what is doing all these people in. Tapped out.
Credit cards can't be far behind. But I think banks were much stricter about extending CC credit than home equity credit. Cuz after all.. home equity credit is secured...... or not.
Rob Dawg
"love minus zero no limit", Bob Dyla
jg and w - DZ Private Bank, Zurich, Switzerland
Oh and, RE, what haven't i been close on so far? am i wrong about asset price deflation? where's the "depression" some keep calling for? we're not even offically in recession at this time.
What do you think will happen to PM,oil, and commodities if the Fed doesn't cut? Has there been a straight climb up since you pulled my quote?
"literally your savings will be in the toilet!"
gotta go get some cleaner 'cause the 'puter screen is covered in bits
LOL
And the local RE establishment is working like HELL to clean up the MLS and dumping non-competitive sellers.
Could you explain that, and suggest how I can get numbers with the FCs? I'm trying to monitor a specific town/neighborhood...
Mr. Shiller, who said its difficult to forecast prices, endorsed legislation proposed by Sen. Chris Dodd, (D., Conn.), and Rep. Barney Frank, (D., Mass.), that would allow the Federal Housing Administration to back as much as $300 billion in mortgages for struggling homeowners.
That'll help, but it ain't going to stop home prices from falling. Plus it could cause the dollar to fall and/or interest rates to rise if it causes the market to get skittish on about the solvency of the US govt.
A few properties I looked at were in foreclosure. They are being offered at 2/3 the price of identical non-foreclosure properties and still can't be sold.
The inventory is huge. At this point, people are hoping for a cat 5 hurricane.
Angry Saver | 04.22.08 - 4:14 pm | #
Angry,
Actual recent numbers from the parents. Appraisal for their house came in at 151k in March. Declining market boxwas checked. They have the largest and nicest house on the street including a pool. 2 houses down,dump,3/2,wood frame(yikes!)no pool. Started at 168k. Now at 128k No lookers at all. Might be worth 40-50k. Next FC. Lady who didn't leave. Asking 179k. I haven't seen a single person even look.
Oh,I forgot to mention the three other empty homes that are not even listed yet(all FC's).
There are only nine homes on the street. 35 empty lots. Newest house?
20 years old. Subdivided in the late fifties...
Chris
ipod,
no. you said that after the BSC bailout and glod and oil was immediately unwound. glod was hit to the low 900's and oil had dropped to below 100. i remember the nite you and mp were fencing with Misean.
Commodities are definitely in a bubble ready to burst.
Proof? The Bloomberg.com homepage just added commodity graphs to their sidebar under the daily Dow graph.
RE
thanks for finding the actual nite of that discussion btwn mp, ipodius, Misean et al regarding oil and glod. i didn't remember the date exactly but was sure it was when oil was much lower than it is today and glod was close to the same.
btw, how do you search for and find previous comments? google didn't quite work for me this time.
Ethan, in California if you buy more than $1000. worth of gold or silver, it is considered an investment so no sales tax. The dealer will ask for your name for the records, but can't legally ask for ID, take it from there. In Oregon and a couple other states there's no sales tax at all.
Also--although the spot prices of gold and silver have dropped, the physical availability has actually shrunk. Nobody is selling physical precious metals. What's trading is promises to buy/sell it.
So you can still order and pay for it, but delivery can take weeks or more.
Could you explain that, and suggest how I can get numbers with the FCs? I'm trying to monitor a specific town/neighborhood...
kis | 04.22.08 - 4:24 pm | #
As hick as the county I live in is the county assessors website has some decent tools. One is you can track all the sales in the county by how many days back you search.
I look for total sales and then search again for 1.00-150.00 sales. This covers all types of legal transfers(FC's/trusts). I know from following it trusts and misc=roughly 15% of the 100.00 transfers. Everything else is FC's.
As for cleaning up the MLS,Dumbass realtors couldn't even figure out properties had been listed multiple times. It really makes the number look bad when the same lot is listed with minor differences 4 or 5 times...
Chris
Xl Capital misses #'s
1.57 vs 2.24
no surprise...
a guess? they raise more capital
Ben 'Bottom's Up' Bernacke. Now that has resonance, as they say in political circles....
mock turtle writes:
"love minus zero no limit", Bob Dylan
From "Bring it All Back Home"
Good one.
☺☺Shocking writes:
"Wow! All of this bad news is making hard on these kind of specul-morons...
WSJ Error Page - WSJ.com SB...ealEstateMain_1
"Don't you just feel horrible for them?
Que verguenza! Just imagine, two years ago they would have been featured on CNN's "Millionaires in the Making" series
sigh
Prices are not going to rise 30-months or whatever after the peak in NOD's unless prices at that point are BELOW what incomes can support. Ever other factor is secondary at this point to the income vs. price problem - without toxic loans, the current prices cannot be sustained.
That being said, the banks are doing everything possible to hide the REO houses in "Level 3 Inventory" so that the full scope of the problem is hidden for a while longer. Anything to keep the scam going, and we still have most everything at "wishing price" level here in Maryland.
Crude oil rose to a record $119.86 a barrel in New York today as the dollar dropped to an all-time low against the euro, and the average price of a gallon of regular gasoline at U.S. filling stations rose to $3.47 this week, according to oil- industry analyst Trilby Lundberg.
Automakers including General Motors Corp., the world's largest, and Toyota Motor Corp. issued statements today saying they're working to meet the federal goal of achieving the fleet average of 35 mpg by 2020.
Still working, yoyoyoyoy
but biofuel's! But electric ! but solar cars !
Boil-In-Oil Be
A good summary from Krugman:
Ho-hum day on the markets
Eh, oils above $119, the euros above $1.60, and the scramble for safety has sent the yield on one-month Treasuries down to 0.59%. Nothing to see here.
Seriously, these are wild and crazy times.
I sure would like to know the demographic break down of those NODS.
RE
come on man. how did u find that ipodius post so quickly? that was great!
This chart is unreal. If I approximate the population of California at 30M, I calculate 1 foreclosure notice per 120 people in 2007.
Think about that next time you are in a crowd.
I am surprised we haven't gotten more stories of friends and or family in foreclosure from California posters. Conservatively assuming no more than 6 degrees of separation between any 2 Californians, the average Californian is no more than 2 degrees from someone that received a notice in 2007 - i.e. either knows someone or knows someone that knows someone.
foo,
You assume an even distribution. Not just aquaintances but also in ownership. Casey Serin was personally responsible for 17 defaults but almost no one knows him personally.
The quarter-by-quarter NOD numbers for CA are almost exactly exponential growth. Extrapolating that curve I get about 577K for all of 2008. (Of course, extrapolation only works until it doesn't... the same curve would suggest something like 7.2M in 2011.)
I know one family that is having to foreclose on THREE houses (two rentals and their own).
awgee writes: jg and w - DZ Private Bank, Zurich, Switzerland
a-, I cannot find DZ on my list, here:
SPBA - Network Swiss Private bank and bankers
Please point for me, sir!
CA Monthly Counties and Cities data is out:
DQNews - California Home Sale Price Medians by County and City
Median decline from the peak prices in CA counties & cities is 29%, up from 25% last month.
THIS, CR, IS WHY SO MANY NODs ARE MOVING TO FORECLOSURE.
It Is the Price Decline, Stupid! (That causes increased foreclosures).
No severe recession in cards for CA. Think in terms of severe depression versus Greater Depression. Then there are rogue economists at UCLA Anderson Business Forecast who are denying that CA is in a recession. These rouges dont look at increase in the Unemployment Rate that is the best confirmation of beginning of recessions. All the cumulative housing led growth in CA is going to be reversed with non-farm employment falling more than 10%. Hey, CR, if employment falls more than 10% would you count that as depression? How about 15% decline?
Jas
CR
The numbers you posted on CA foreclosures back to Q305 show quarterly increase of 25%, so far no slowdown. Using Q1 to estimate full year looks too conservative. 2/3 of 600k is 400k.
The link to the chart somebody else posted (Fig. 1.7 monthly mortgage resets, billions) shows the peak in prime resets around Oct this year, the even higher peak in alt-A plus option arms three years later... option arm is much more dangerous because loans keep growing until default... and, the later waves will hit the beach when housing prices are much lower than now, hugely boosting losses...
I had seen the chart earlier, but did not pay much attention to the option arm wave... how can the recession be short and shallow when the defaults will continue well into 2012? IMO your only hope is a double dip, with big scoops (d-cup). I see prices overshooting to the downside... punters should keep their powder dry, opportunities are coming, say xmas 2012.
Retiring boomers would open up jobs, except that I am already hearing of boomers postponing retirement as they carefully consider the state of their 401(k)s.
On the walk away theme:
Had a foreclosee come in. He had lost his job, & got a new one making much less, so could no longer make his payments.
I asked him if he would have continued to pay if he hadn't lost his job, seeing as how his house was now $125k underwater (paid 375, no down payment). He wasn't really clear, but went on about how it was immoral to ask somebody to pay and pay and after many years--15 say--just be up to parity, in other words, have nothing. If he hadn't lost the job, I think he would have paid for a fair while, because the lack of value wasn't being rubbed in his face. But eventually he would have asked himself what am I doing this for. He was referred by an appraiser who lives in the same neighborhood, whose property is also about the same amount underwater. He stopped paying too. The appraiser said there are houses where they are asking 50 cents on the dollar or less, in the square mile surrounding them. Still nobody's buying.
Rob,
Yes, my calc made a number of bold assumptions. Just ballparking.
Why people might not yet know foreclosees personally
- these are notices and FBs are not talking
- concentration - some people are in crowds of foreclosees and/or some foreclosees account for many notices.
And of course, we have one poster here who knows that family with three lost homes. Now we are all (sort of) 2 degrees from them.
Ipodius,
What do you think will happen to PM,oil, and commodities if the Fed doesn't cut? Has there been a straight climb up since you pulled my quote?
I actually expect a short-term (1 3- months) drop once the Fed stops. However, I also expect a concomitant fall in the Euro potentially concurrent with a cut by the ECB which will bring a lot more European money into the commodities space.
As commodity inventories are generally low, hoarding that is starting to take place now will only get worse over the next few months. Therefore any dip or sharp drop is likely a real buying opportunity.
Now let me also point out that I hate to generalize as any commodity has its own demand/supply balance. I also want to point out that I believe that PMs are going to do very well even in the face of a potentially severe fall of other commodities as long as it is within a dire economic background as I currently expect.
Since your quote there has been a pretty steady climb in CL.
INO Futures and Commodities - Energy - CRUDE OIL Jan 2010 (NYMEX:CL.F10) Price Chart and Quote
Whereas the CRB has experienced somewhat of a decline:
INO Futures and Commodities - Indexes - REUTERS/JEFFERIES CRB INDEX Dec 2009 (E) (NYBOT:CR.Z09.E) Price Chart and Quote
As long as we see a CL climb, foods will not decline significantly IMO. Because of extremely low inventories and key suppliers like Argentina, Russia, Ukraine and Kazakhstan drastically reducing exports, I expect wheat and rise especially to rise still further possibly much further and not follow your D word.
We will see how it develops but I am very optimistic on foods and PMs, less so on base metals with the possible exception of copper. If CL continues to rise, a move away from oil just about has to involve lots of copper. Hybrids use twice the copper content than normal cars, as an example.
Regarding searching of posts:
I search at site:haloscan.com with calculatedrisk poster subject ** subject
The (*) proximity search seems to help at times though is not dependable but can be useful as the doc includes all posts for that subject.
p.s Thanks idoc
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