I live in Corona Del Mar here in OC. I know of 3 properties here(1 in Newport Coast), over 3M, going into foreclosure and have never showed up as a NOD. The banks must be attempting to not show these large losses in premium areas; does this make any sense? I am seeing it with my own eyes, but don't know why these props are not showing up.
Banks are not filing a lot of NODs on defaults to hide the actuals. I know of two homes that have been in default since last summer and no NOD has been filed.
This is the house next to me in the bay area .. hooray for me. House was purchased for $480M 7/05. Foreclosed 9/07 for a loan amount of $370M. Now listed for $272M.
I live in a nice part of San Leandro - first town south of Oakland. In the last couple weeks, I've seen two houses for sale put up the "sale pending" signs, just to see those sale pending signs come down a week later. The houses are still on the market. On the other hand, the house across the street from me had it's first open house on Sunday and they got two offers (listed at $620K). We'll see if the sale goes through. The house was purchased for $580K in 2004.
I was cruising some various websites earlier this week to look at bank-owned homes for sale -- Countrywide, Wells Fargo, Citibank -- to see if they were selling any houses in desirable parts of the East Bay (good parts of Oakland, Alameda, Berkeley). Nothing yet. Just a bunch of crappy homes in East Oakland.
The house below me just sold for $450K in Ben Lomond -- Santa Cruz Mtns. They were asking $515K last winter and it was listed at $465K. All things considered, that seems pretty high to me. Nonetheless, someone stepped up and paid for it...
did anyone see this at TBP today:
homedebtor n. A homeowner with an extremely large mortgage, particularly one that he or she is unlikely to ever pay off.
OK - I'll be the one to say it. "But it's different here!" Isn't it?
I live in SF proper, and similar to the Bay Area, the less desirable edges are where it starts. But like the tide, no one knows how far it's going to reach . . .
The coldest winter I ever spend was the summer in San Francisco that I walked away from my house and had to sleep in the REO down the street that didn't have any heat or copper pipes.
Bay Area home sales were at their lowest level in more than two decades as potential buyers and sellers continued to wait out market turbulence
Oh? "Sellers" are waiting out the turbulence? You mean there is record low inventory not near record high inventory? Asshats. I'm getting really pissed at the lazy MSM. Sellers are rushing the exits and getting stuck. That is not "waiting out the turbulence."
The Berkeley Daily Planet has listings of properties sold for the E Bay cities (basically Oakland, Berkeley, Richmond, El Cerrito). They also include last sale date and price (if known). A few weeks ago I took all of the listings last sold in 2005, 2006, 2007 and calculated the difference between last sale price and current sale price. For the 15 or so properties the diffence was around -30% (with a discount range of something like 0% for ritzy addresses down to more like 55% for somewhere scary-sounding and no doubt trashed).
Checking subsequent weeks but skipping the math it looks about the same.
So, for properties that are selling, it looks like prices have dropped >30% from the peak in the East Bay. That being said, there's not a whole bunch of turnover in the nicer neighborhoods and the discounts there seem to be more like the single digits, if that.
I pull the probably not so accurate numbers off foreclosures.com this morning. LA still looks worse then the bay area, but neither look good.
PreFore - Auction - REO
California 611,538 - 303,272 - 198,700
Bad counties:
Alameda\t19153\t9369\t5244
Contra Costa\t24,347\t12535\t7676
Fresno\t15059\t7430\t4291
Kern\t18026\t9430\t7507
Los Angeles\t122049\t56922\t31467
Orange\t32313\t14750\t11889
Riverside\t70529\t37100\t26238
Sacramento\t42011\t22290\t15628
San Diego\t47111\t23945\t16501
San Joaquin\t22035\t11749\t8137
Santa Clara\t15531\t6557\t3658
Solano\t11166\t5872\t3496
Stanislaus\t15640\t8241\t5471
Ventura\t11226\t5340\t2887
SF county still looked good which makes me question the data..
San Francisco\t3324\t1511\t796
Impossible! Prices no longer matter! With our new loan products, we can get anyone into a home! It's different here... it's.... aarrrghhh!!! I'm melting... what a world!
Gee, who coodadnode that people buying houses they couldn't afford would lead to problems.
The real question is how long it will be until the banks are forced to disgorge all this inventory so we can get the price discovery train moving!
Or, are the banks simply going to pretend the empty houses don't exist, slap them all with a price tag at 5% down from 2005 peak, and then hope the problem goes away on its own? Anything to prevent realistic pricing and affordable housing!
Or, are we going to have the banks hide the losses forever, labeling each foreclosed ruin with a price 5% under 2005 peak, and then watch them hope that somehow the poor masses will get back into the game?
"My name is McMansion, king of kings: Look on my price, ye Mighty, and despair!' Nothing beside remains. Round the decay of that foreclosed wreck, boundless and bare the tents of the home-moaners stretch far away."
Holy COW. Anyone watching GOOG here. What a rocket. I put a strangle on just before the close because I was itching to throw some money at my masters on Wall St, which should work out as the shorts scramble to cover and drive everything higher as their margin calls obliterate them.
Hey Echo Chamberers!
Having fun stroking each others' egos? Because the truth is far less drastic than what the papers and the bloggers are willing to admit: some prices are going down, some are staying level and some are rising. Guess the truth never makes for a compelling headline. Just saw a sale in San Carlos cross the wire at $693/ft2. Sounds pretty healthy to me. I wonder why the press and the bloggers focus on the volume of sales and not price per square foot?
"I know of two homes that have been in default since last summer and no NOD has been filed."
Ministry of Truth | 04.17.08 - 4:25 pm | #
All I can say is that isn't just happening out there. I can find HUNDREDS of homes in Charlotte County,Fl that are empty and no paperwork has even been filed yet. I don't know if the banks are trying to meter out the FC's or if the counties just can't handle the paperwork any faster...But the backlog is pretty ugly.
"Guess the truth never makes for a compelling headline." -- Sir Thomas of Thomasville
Of course. Why do you think the morning headline doesn't say "Thomas Is A Lunkhead" everyday? That is not compelling or newsworthy, although it is unquestionably true.
People have realized the theater is on fire. The smart are across the big street, having dinner to watch the 'new show.' Some are trying to casually slide toward the exits.
I still do not expect panic before the fall. During panic is when people get trampled on the way out.
One thing I've learned, investment emotions are slow. I think it will take having the kiddies back in school before sellers realize the 'really want to buy' (at their price) people are done.
That fraction of loans being jumbo shocked me too...
Report from San Rafael, CA (Marin County). I've been tracking unsold inventory since 2005. Here's where we stand for April:
2005: 55
2006: 65
2007: 87
2008: 176
Yeah, Marin County is one of those "it's different here" places. And it's been true that prices haven't dropped like they have in nearby counties, but with a spike in inventory like this, well, we'll see how different we are in the end.
And no, this is not a fluke related to this month. Inventory has been trending about 100% higher in a year-over-year comparison since at least November 2007.
Oh, and on a personal note, this turn of events is very hard for me to bear. Having sold in 2005 and rented since, it's shocking and surprising to see such distress in the market.
People have realized the theater is on fire. The smart are across the big street, having dinner to watch the 'new show.' Some are trying to casually slide toward the exits.
The last lifboat left the Lido Deck early 2006. We've picked a few lucky jumpers out of the water early on but not many since then.
I still do not expect panic before the fall. During panic is when people get trampled on the way out.
We don't disagree often but March sales number have got to be IV icewater to would be sellers.
That fraction of loans being jumbo shocked me too...
The number of "unreporteds" are my latest concern. Vacant houses, abandoned by buyers yet unattached by lenders in particular.
Got Popcorn?
Well, seed corn and milled polished rice and oats in bulk. Surely it isn't time for desert yet.
Holy COW. Anyone watching GOOG here. What a rocket. I put a strangle on just before the close because I was itching to throw some money at my masters on Wall St, which should work out as the shorts scramble to cover and drive everything higher as their margin calls obliterate them.
Just like dotcom bear market rallies.
It seems the engineers at Google, much like the engineers at IBM, are expert currency traders. $202M in revenue is due to currency changes. This seems to be a theme ... if the company doesn't really manufacture that much, but does a lot of business overseas, it's in a sweet spot.
Per DataQuick, in March 2008 Alameda County recorded 971 home sales. In the same month almost the same number (853) Notices of Trustee Sales were recorded in Alameda County.
Notices of Trustee Sales during Jan-March '08 were 2.6 times those during the same 2007 period.
But for a real baseline, the 2008 quarter had such notices 9.5x greater than 2006.
SweetHomeKilla writes:
"Sellers are rushing the exits and getting stuck."
I have a better analogy.
The door is a giant guillotine that is opening and closing at an ever quicker rate and random interval.
Science Fiction to the rescue. Asimov wrote a story (in Caves of Steel?) about a family stuck in traffic where the overpopulation solution was to randomly gas the entire Lincoln Tunnel on a random basis. The annoying family behind them wasn't so lucky.
Maybe the same for sellers? Or maybe rationing sellers' permits like taxi medallions? We could solve the CA budget crisis by open outcry auctioning permits.
Just a bunch of crappy homes in East Oakland.
Greetings fellow Bay Aryans. Yes, it is hand to hand combat in the flatlands and marginal areas, but occasionally a mortar gets lobbed into the hills. For example: $929900 CUSTOM BUILT 3.5 STORY HOME IN THE BERKELEY HILLS. Was sold in 2006 for $1.6 million and a year later WaMu took it back for $1,066,217. Oh, and the Relitter isnt wasting his time (err money), listing it on the MLS. A bargain all around.
There is also a newly constructed home at 1871 Tunnel Road that is owned by WaMu. Appears that the lien was for $750k, so they might come out even as it is offered at $815k. As the MLS listing says: Contemporary 3 bed 3 bath in Oakland/Berkeley Hills. Banks Loss is your gain.
I used to live in San Leandro's North Area ten years ago. It is a lovely neighborhood and one of the Bay Area's secret little gems. I have been stunned at how much prices appreciated since I left. Do you get the sense that the neighborhood has become that yuppified?
I think April sales in Ventura won't be so bad, I'm watching zip codes on Melissa Data and since the YoY comparison will be the best we have seen for quite some time and MoM will definitely be positive.
This is due to seasonality and the subprime meltdown last March which affected April closings. The numbers will look good enough where the Realtors will be calling bottom.
Also Ventura listings have been leveling off and even dropping in many areas. I think the big brokerages are telling sellers to wait it out.
We of course have much further to drop I am just trying to see the near future a little clearer, a little further out things are much clearer (imho) then what is going to happen over the next couple of months.
I bought my first house right across the street from that place back in 1987 for $106,500. Not much moving there at this time but there are still some sales. The $ per sq ft it that place sells for asking is $620.
I think April sales in Ventura won't be so bad,...
Also Ventura listings have been leveling off and even dropping in many areas. I think the big brokerages are telling sellers to wait it out.
Yeah, but why is the question. For well more than a year half the inventory hasn't really been "for sale" as much as "make me rich, please." They still need to be sold and are only off the listings so as to reposition. There's another reason inventory is dropping; the new owners (the bank) aren't renewing listings until they get the paperwork processed. Finally anecdotal but through research nonetheless, I'm seeing easily twice as many "For Sale" signs in the yard as listings I can find in the database(s). (Las Posas Estates).
SweetHomeKilla writes:
Check today's released h3 report. It says "April 17, 2008", yet the report is the same as last week and doesn't include ANY new data.
I agree with SweetHomeKilla; a Fed chart I monitor weekly is their Page 3 ( Brits know what I mean - cf The Sun, a Brit tabloid ). So far, at 8:23 EST, their Adjusted Monetary Base is exactly the same as last weeks !
Separately, let me remind people once again that you can watch the additional slosh the Fed has provided by checking the slosh report daily after, say 10 am Eastern:
The Slosh Report
$107B average slosh and counting ( versus $30B last Aug)
-K
Wow, the slowest March since records began in 1988? Back then I was a long-haired punk, chain smoking Marlboros, and hanging out in metal clubs. Lot of water under that bridge.
Maybe the geniouses at DataQuick can go search for old paper records in a Bay Area warehouse to give more historical context to this housing crash.
A new career field is born, "forensic bubble economist."
Thought on how Countrywide could be holding less REO and not more??
Um, maybe they are lying scumbuckets?
Not that anyone in CFC would commit fraud, of course. We all know that those FBI investigations and class action lawsuits are just due to a bunch of bitter, angry folks.
SweetHomeKilla,
Well, the Fed did sell $12 billion more of its Treasuries last week. Not that they can sustain that type of sell off for more than a year. I agree with you that TAF has been maxed out and fully utilized (not sure what ipodius was getting at?) Although, note that the last TSLF auction had a bid to cover of .68 so things are (temporarily?) slowing down at the 'great Treasury swap meet'.
I have several friends who have been waiting out the bubble and want to buy in decent areas in San Francisco or the peninsula around Stanford. During the last month they have all made offers and in every single case they were outbid by a dozen people half of whom had no contingencies. If you look at the median household income, it is ~$100K in these towns, but the home prices are >$1M. So what's going on? I've been told that many buyers have large down payments (~$500K) from company stock options or equity in their current homes. Does anyone know where to find data to verify or debunk this claim? Thanks in advance.
If you look at the median household income, it is ~$100K in these towns, but the home prices are >$1M. So what's going on?
Median income figures include the "peons" and retired persons.
Peons are not in the market for the few houses that come up for sale in the Peninsula (and retired persons are the ones who bought in when prices were an order of magnitude less).
GOOG went up $75 PER SHARE in after hours today. There are 5000 or so peeps at GOOG with substantial stock ownership. Many of them are looking at houses in the area. Do The Math.
The bulk of GOOG's current employees only have a few hundred shares - nowhere near enough to make a damn bit of difference.
The number of employees with tens of thousands or more shares number in the hundreds. Most in this group got their shares pre-IPO and have bought/upgraded their homes already.
Wow, I never thought I'd hear anyone describe San Leandro as lovely. Less of a slum than Oakland, sure, but lovely? Charmless marginal neighborhoods that have had big appreciation are the ones that I expect to have the biggest drops in property values when all this is done.
For non-bay area folks, San Leandro is a 1950's and 1960 vintage suburb that is mostly made up of 1 story stucco houses on 6000 square foot lots that are bare of landscaping (but feature above ground power lines to make up for this defect). It is nicer than Oakland in that it is less crime ridden, but so is Detroit.
Another data point: 94301, a privileged area of Mid Pen but not like Woodside or Atherton or Los Altos Hills. Two houses near us - one at $1400 per sqft and the other at $1500 per sqft. Both of these houses were around 1000 sqft on small lots. I have posted this before but the commenters were doing Bay Area prices so I couldn't resist.
The area on the northern border of Santa Clara Co and the souther border of San Mateo Co are still sellers market. Maybe Goog is affecting these areas?
My rental house just north of Campbell and south of Santana Row rented in two days with 5 offers. Got more than asking rent.
Interesting Times!
Moody's Investors Service placed its long-term ratings on Merrill Lynch and its subsidiaries on review for downgrade.
Moody's said the review is in response to continued deteriorating conditions in the mortgage market and the increased expected losses on the New York-based firm's portfolio of super-senior CDO's and related guarantor hedges.
Markdowns on these positions and additions to counterparty credit reserves were a major contributor to the $2 billion loss Merrill Lynch reported for the first quarter on Thursday.
Moody's forecasts potential further markdowns of about $6 billion beyond the charges recognized by Merrill Lynch in the past three quarters. This forecast, combined with the first quarter loss, means that improvements in the company's most important capital ratios will be delayed.
Money Moves
Given a lack of visibility into counterparty risk, many CFOs are scrutinizing how they are investing precious excess cash. Investor focus has shifted from yield to risk, says Sarah Jones, co-head of liquidity and investment products at JP Morgan Treasury and Securities Services.
Driving this is the discovery that short-term cash funds and even some money-market funds an investment heretofore thought highly liquid are exposed to structured investment vehicles (SIVs) that purchased toxic mortgage-backed securities and collateralized debt obligations. CFOs are shedding investments in funds with SIV exposure that don't offer complete transparency or daily liquidity.
In August 2007, Ethan Manuel, treasurer at $800 million Mentor Graphics, had migrated the company's short-term investments from asset-backed paper to money-market funds to maintain liquidity while gaining a bit on the return. He switched back to treasuries and commercial paper last November. "We went away from money-market funds, because we weren't sure if there would be write-downs or liquidity concerns," says Manuel. "Right now, we're being very careful." K.M.K.
Taking the Measure of Your Banks
Given the rockiness in the financial sector, CFOs would be remiss if they didn't question the stability of their banking partners. However, determining just how strong a specific bank is can take some doing.
To evaluate large banks' capital adequacy, many analysts look at "tangible common equity," a measure of net worth relative to assets, says Brent Christ, an analyst with Fox-Pitt Kelton. Tangible common equity, a non-GAAP measure, is common shareholders' equity, less intangibles and goodwill. The ratio of TCE to assets (less goodwill and intangibles) is generally considered more healthy if it is at least 6 percent for smaller banks and 4 percent for larger ones, Christ says.
OCCs Quarterly Report on Bank Derivatives Activities
Third Quarter 2007 http://www.occ.treas.gov/ftp/release/2007-137a.pdf
Derivatives activity in the U.S. banking system is dominated by a small group of large financial institutions. Five
large commercial banks represent 97% of the total industry notional amount, 78% of total trading revenues and
87% of industry net current credit exposure.
The first step in measuring credit exposure in derivative contracts involves identifying those contracts where a
bank would lose value if the counterparty to a contract defaulted today. The total of all contracts with positive
value (i.e., derivatives receivables) to the bank is the gross positive fair value (GPFV) and represents an initial
measurement of credit exposure. The total of all contracts with negative value (i.e., derivatives payables) to
the bank is the gross negative fair value (GNFV) and represents a measurement of the exposure the bank poses
to its counterparties.
A banks net current credit exposure across all counterparties will therefore be the sum of the gross positive fair
values for counterparties lacking legally certain bilateral netting arrangements (this may be due to the use of
non-standardized documentation or jurisdiction considerations) and the bilaterally netted current credit
exposure for counterparties with legal certainty regarding the enforceability of netting agreements.
This net current credit exposure is the primary metric used by the OCC to evaluate credit risk in bank
derivatives activities. A more risk sensitive measure of credit exposure would also consider the value of
collateral held against counterparty exposures. While banks are not required to report collateral held against
their derivatives positions in their Call Reports, they do report collateral in their published financial statements.
Notably, large trading banks tend to have collateral coverage of 30-40% of their net current credit exposures
from derivatives contracts.
Net current credit exposure for U.S. commercial banks increased $53 billion in the third quarter to $252 billion.
At the end of the third quarter, legally enforceable netting agreements allowed banks to reduce the gross credit
exposure (GPFV) of $1.6 trillion by 84% to $252 billion in net current credit exposure
People here are painting both oakland and san leandro in broad strokes,which is misleading.Parts of san leandro were built in the 20's and 30's and these established neighborhoods can be quite nice.Oakland is a city of neighborhoods,and even excluding the montclair district some neighborhoods are as nice as any middle class area in the bay area.Of course other parts of oakland are contested territory,or so gang infested that they resemble baghdad...there is a lot of older housing stock in oakland that has been rehabbed over the last few years and if the city government could ever become as functional as ozzie osborne's family it would be a wonderful place.
Peconic Bay and Winston
Continuing on what Tom Stone said -- you're both right. I live in the neighborhood that Peconic Bay describes, in the north part of town off 580. Houses here were built in the 1920's-1940's, attractive architecture (Tudors and the like) and well kept houses and yards. I love the neighborhood. My lot is only 6500 square feet, but I like it that way -- who wants a yard to take care of? I have 3 bedrooms, 1500 sq ft, a deck and a small lawn in my back yard and the climate is perfect here. A lot of couples in their late 20's & 30's have been moving here and having kids (like me & my wife) -- it's stroller city. I moved here in 2003 so to you I might be one of the yuppies for all I know ( but I drive a Corolla, so probably not ). The city government seems to have their act together for the most part.
To answer your question Peconic Bay -- no, it hasn't gotten that yuppified. We've got a couple good coffeehouses and a couple good restaurants, but that's about it. The city tried to get a Trader Joes to come to downtown when another supermarket closed, and a Trader Joe's rep said there weren't enough of their demographic here. They specificially said not there weren't enough college graduates! I mean, they can think it, sure, but I couldn't believe they actually said it out loud....
Other parts of town -- um.... aren't far off from Winston's description. But the great thing about large parts of town being blue collar is that I can actually find parking at the BART station in the morning without getting up before the crack of dawn. So there.
Ipodius, get your facts straight:)
SweetHomeKilla @ 5:25 pm
Just as a point of clarity sweet, I was referencing the TSLF in my last comments on the Fed, and mentioned how that window's bids were actually down. I said nothing about the TAF. The TSFL servers a different customer, and that's the one everyone here generally has their panties in a bunch about.
Yeah. There are plenty of people in the Bay Area still doing fine. There are many companies thriving or at least holding the line. The directors and Veeps from those companies all want to live in Palo Alto and Los Gatos (etc.) Those places will hold up longer than the rest, and some neighborhoods will only fall in the most dire of circumstances. I still expect them to fall, but it isn't as certain as, say, Hayward.
Local data can be obtained from county governments already. Even in upper-class communities, over half the houses for sale are in foreclosure.
uhhh, yeah....
About 6 weeks ago a realtor told me that 1/3 single family homes on the market in San Jose/Campbell area were short sales/foreclosed properties.
I can only imagine this percentage has gone up since then.
Is that type of data available on the web?
I live in Corona Del Mar here in OC. I know of 3 properties here(1 in Newport Coast), over 3M, going into foreclosure and have never showed up as a NOD. The banks must be attempting to not show these large losses in premium areas; does this make any sense? I am seeing it with my own eyes, but don't know why these props are not showing up.
Banks are not filing a lot of NODs on defaults to hide the actuals. I know of two homes that have been in default since last summer and no NOD has been filed.
This is the house next to me in the bay area .. hooray for me. House was purchased for $480M 7/05. Foreclosed 9/07 for a loan amount of $370M. Now listed for $272M.
Awesome.
Two observations on the East Bay Area market:
"stunning"....
You're too kind.....
........
The house below me just sold for $450K in Ben Lomond -- Santa Cruz Mtns. They were asking $515K last winter and it was listed at $465K. All things considered, that seems pretty high to me. Nonetheless, someone stepped up and paid for it...
if you have some time to kill today go to redfin.com and do the map-level search of S Oakland & Richmond listings.
One word: chilling.
did anyone see this at TBP today:
homedebtor n. A homeowner with an extremely large mortgage, particularly one that he or she is unlikely to ever pay off.
http://bigpicture.typepad.com/comments/2008/04/word-of-the-day.html
how long till ubernerd ends up in websters...
Troy,
I've done the same thing with San Diego...
one more word: unbelievable...
OK - I'll be the one to say it. "But it's different here!" Isn't it?
I live in SF proper, and similar to the Bay Area, the less desirable edges are where it starts. But like the tide, no one knows how far it's going to reach . . .
The coldest winter I ever spend was the summer in San Francisco that I walked away from my house and had to sleep in the REO down the street that didn't have any heat or copper pipes.
spent
Bay Area home sales were at their lowest level in more than two decades as potential buyers and sellers continued to wait out market turbulence
Oh? "Sellers" are waiting out the turbulence? You mean there is record low inventory not near record high inventory? Asshats. I'm getting really pissed at the lazy MSM. Sellers are rushing the exits and getting stuck. That is not "waiting out the turbulence."
This is good news right?
looks like 'price discovery' isn't just a problem in the markets for illiquid securities. Maybe OREO can be classified as a Level 3 asset?
Shocked, but not surprised.
The Berkeley Daily Planet has listings of properties sold for the E Bay cities (basically Oakland, Berkeley, Richmond, El Cerrito). They also include last sale date and price (if known). A few weeks ago I took all of the listings last sold in 2005, 2006, 2007 and calculated the difference between last sale price and current sale price. For the 15 or so properties the diffence was around -30% (with a discount range of something like 0% for ritzy addresses down to more like 55% for somewhere scary-sounding and no doubt trashed).
Checking subsequent weeks but skipping the math it looks about the same.
So, for properties that are selling, it looks like prices have dropped >30% from the peak in the East Bay. That being said, there's not a whole bunch of turnover in the nicer neighborhoods and the discounts there seem to be more like the single digits, if that.
I pull the probably not so accurate numbers off foreclosures.com this morning. LA still looks worse then the bay area, but neither look good.
PreFore - Auction - REO
California 611,538 - 303,272 - 198,700
Bad counties:
Alameda\t19153\t9369\t5244
Contra Costa\t24,347\t12535\t7676
Fresno\t15059\t7430\t4291
Kern\t18026\t9430\t7507
Los Angeles\t122049\t56922\t31467
Orange\t32313\t14750\t11889
Riverside\t70529\t37100\t26238
Sacramento\t42011\t22290\t15628
San Diego\t47111\t23945\t16501
San Joaquin\t22035\t11749\t8137
Santa Clara\t15531\t6557\t3658
Solano\t11166\t5872\t3496
Stanislaus\t15640\t8241\t5471
Ventura\t11226\t5340\t2887
SF county still looked good which makes me question the data..
San Francisco\t3324\t1511\t796
Bstaz --
San Francisco is different. No, seriously, it is. I didn't say bulletproof. But as far as California RE goes, San Francisco will be the last to fall.
Impossible! Prices no longer matter! With our new loan products, we can get anyone into a home! It's different here... it's.... aarrrghhh!!! I'm melting... what a world!
Gee, who coodadnode that people buying houses they couldn't afford would lead to problems.
The real question is how long it will be until the banks are forced to disgorge all this inventory so we can get the price discovery train moving!
Or, are the banks simply going to pretend the empty houses don't exist, slap them all with a price tag at 5% down from 2005 peak, and then hope the problem goes away on its own? Anything to prevent realistic pricing and affordable housing!
Or, are we going to have the banks hide the losses forever, labeling each foreclosed ruin with a price 5% under 2005 peak, and then watch them hope that somehow the poor masses will get back into the game?
"My name is McMansion, king of kings: Look on my price, ye Mighty, and despair!' Nothing beside remains. Round the decay of that foreclosed wreck, boundless and bare the tents of the home-moaners stretch far away."
Oops... sorry about the copy-paste error on that last post!
I'm in Syracuse. It's different here.
Two Northern Ca banks take some hits: (the first of many)
Mortgage meltdown hits American River Bank
Central Valley Business Times
Interest squeeze hits Pacific State Banks bottom line
Central Valley Business Times
Holy COW. Anyone watching GOOG here. What a rocket. I put a strangle on just before the close because I was itching to throw some money at my masters on Wall St, which should work out as the shorts scramble to cover and drive everything higher as their margin calls obliterate them.
Just like dotcom bear market rallies.
PreFore - Auction - REO
Sacramento 42011 22290 15628
Inventory is around 15000ish just to give some idea of volume.
"Sellers are rushing the exits and getting stuck."
I have a better analogy.
The door is a giant guillotine that is opening and closing at an ever quicker rate and random interval.
Six months ago many people were getting through, some losing some of the hair off their back, a few more getting skinned.
Now only the lucky are getting through alive.
Soon the door will be completely plugged with bodies.
+1 on Rob Dawg's comment
Sellers are waiting for Buyers. Buyers are waiting for price drops.
Turbulence is what sellers have in their digestive system!
Soon the door will be completely plugged with bodies.
SweetHomeKilla | 04.17.08 - 5:09 pm |
Not so fast. Bodies are food. I expect that those bodies will be eaten by hungry people before they can plug the door.
"Mommy, I want the fingers..."
Hey Echo Chamberers!
Having fun stroking each others' egos? Because the truth is far less drastic than what the papers and the bloggers are willing to admit: some prices are going down, some are staying level and some are rising. Guess the truth never makes for a compelling headline. Just saw a sale in San Carlos cross the wire at $693/ft2. Sounds pretty healthy to me. I wonder why the press and the bloggers focus on the volume of sales and not price per square foot?
"Sellers are waiting for Buyers. Buyers are waiting for price drops."
paraphrasing DR Horton: 'It's a buyers' marker when there are buyers
crispy&cole writes:
Two Northern Ca banks take some hits: (the first of many)
Thanks for the links
I intentionally avoided the cannibalism angle, which had crossed my mind:)
Now for some substance...
To prove ipodius wrong:
Term auction credit 100,000 0 + 100,000 100,000
Primary dealer credit facility 24,804 - 7,758 + 24,804 25,655
Repurchase agreements (4) 106,964 + 7,785 + 78,393 104,250
FRB: H.4.1 Release--Factors Affecting Reserve Balances--December 3, 2009
To summarize: TAF did not change, primary dealer credit decreased by 7.7 billion, but was simply moved to a normal repo agreement.
Ipodius, get your facts straight:)
"I know of two homes that have been in default since last summer and no NOD has been filed."
Ministry of Truth | 04.17.08 - 4:25 pm | #
All I can say is that isn't just happening out there. I can find HUNDREDS of homes in Charlotte County,Fl that are empty and no paperwork has even been filed yet. I don't know if the banks are trying to meter out the FC's or if the counties just can't handle the paperwork any faster...But the backlog is pretty ugly.
Chris
but wait! Thomas has heard one house sold! So I guess things are fine after all.
SF is both a city and a county--one and the same and IS a market unto itself. So for now, looks good(or less bad)
"Guess the truth never makes for a compelling headline." -- Sir Thomas of Thomasville
Of course. Why do you think the morning headline doesn't say "Thomas Is A Lunkhead" everyday? That is not compelling or newsworthy, although it is unquestionably true.
Sellers are rushing the exits and getting stuck."
People have realized the theater is on fire. The smart are across the big street, having dinner to watch the 'new show.' Some are trying to casually slide toward the exits.
I still do not expect panic before the fall. During panic is when people get trampled on the way out.
One thing I've learned, investment emotions are slow. I think it will take having the kiddies back in school before sellers realize the 'really want to buy' (at their price) people are done.
That fraction of loans being jumbo shocked me too...
Got Popcorn?
Neil
Report from San Rafael, CA (Marin County). I've been tracking unsold inventory since 2005. Here's where we stand for April:
2005: 55
2006: 65
2007: 87
2008: 176
Yeah, Marin County is one of those "it's different here" places. And it's been true that prices haven't dropped like they have in nearby counties, but with a spike in inventory like this, well, we'll see how different we are in the end.
And no, this is not a fluke related to this month. Inventory has been trending about 100% higher in a year-over-year comparison since at least November 2007.
Oh, and on a personal note, this turn of events is very hard for me to bear. Having sold in 2005 and rented since, it's shocking and surprising to see such distress in the market.
Who could have seen this coming?!
I'm in Syracuse. It's different here
You mean you don't have three neighbors with $3 million homes in foreclosure in Syracuse? Are you sure?
ps. it's a gorgeuos day here today... glad i can still sleep on the streets if need be
Another hit at ipodius the Bernanke apologist.
You think the Fed is doing a good job? Why then can they not even reliably report statistics?
Check today's released h3
report. It says "April 17, 2008", yet the report is the same as last week and doesn't include ANY new data.
Those asshats can't even properly get a computer generated report up on the web.
Also, if you check their links for their previous reports, some of the text links are broken.
The Fed that has billions of dollars can't even reliably provide basic statistics!
People have realized the theater is on fire. The smart are across the big street, having dinner to watch the 'new show.' Some are trying to casually slide toward the exits.
The last lifboat left the Lido Deck early 2006. We've picked a few lucky jumpers out of the water early on but not many since then.
I still do not expect panic before the fall. During panic is when people get trampled on the way out.
We don't disagree often but March sales number have got to be IV icewater to would be sellers.
That fraction of loans being jumbo shocked me too...
The number of "unreporteds" are my latest concern. Vacant houses, abandoned by buyers yet unattached by lenders in particular.
Got Popcorn?
Well, seed corn and milled polished rice and oats in bulk. Surely it isn't time for desert yet.
Holy COW. Anyone watching GOOG here. What a rocket. I put a strangle on just before the close because I was itching to throw some money at my masters on Wall St, which should work out as the shorts scramble to cover and drive everything higher as their margin calls obliterate them.
Just like dotcom bear market rallies.
It seems the engineers at Google, much like the engineers at IBM, are expert currency traders. $202M in revenue is due to currency changes. This seems to be a theme ... if the company doesn't really manufacture that much, but does a lot of business overseas, it's in a sweet spot.
Per DataQuick, in March 2008 Alameda County recorded 971 home sales. In the same month almost the same number (853) Notices of Trustee Sales were recorded in Alameda County.
Notices of Trustee Sales during Jan-March '08 were 2.6 times those during the same 2007 period.
But for a real baseline, the 2008 quarter had such notices 9.5x greater than 2006.
SweetHomeKilla writes:
"Sellers are rushing the exits and getting stuck."
I have a better analogy.
The door is a giant guillotine that is opening and closing at an ever quicker rate and random interval.
Science Fiction to the rescue. Asimov wrote a story (in Caves of Steel?) about a family stuck in traffic where the overpopulation solution was to randomly gas the entire Lincoln Tunnel on a random basis. The annoying family behind them wasn't so lucky.
Maybe the same for sellers? Or maybe rationing sellers' permits like taxi medallions? We could solve the CA budget crisis by open outcry auctioning permits.
Just a bunch of crappy homes in East Oakland.
Greetings fellow Bay Aryans. Yes, it is hand to hand combat in the flatlands and marginal areas, but occasionally a mortar gets lobbed into the hills. For example:
$929900 CUSTOM BUILT 3.5 STORY HOME IN THE BERKELEY HILLS. Was sold in 2006 for $1.6 million and a year later WaMu took it back for $1,066,217. Oh, and the Relitter isnt wasting his time (err money), listing it on the MLS. A bargain all around.
There is also a newly constructed home at 1871 Tunnel Road that is owned by WaMu. Appears that the lien was for $750k, so they might come out even as it is offered at $815k. As the MLS listing says: Contemporary 3 bed 3 bath in Oakland/Berkeley Hills. Banks Loss is your gain.
query_tool,
I used to live in San Leandro's North Area ten years ago. It is a lovely neighborhood and one of the Bay Area's secret little gems. I have been stunned at how much prices appreciated since I left. Do you get the sense that the neighborhood has become that yuppified?
Thanks,
Rob,
I think April sales in Ventura won't be so bad, I'm watching zip codes on Melissa Data and since the YoY comparison will be the best we have seen for quite some time and MoM will definitely be positive.
This is due to seasonality and the subprime meltdown last March which affected April closings. The numbers will look good enough where the Realtors will be calling bottom.
Also Ventura listings have been leveling off and even dropping in many areas. I think the big brokerages are telling sellers to wait it out.
We of course have much further to drop I am just trying to see the near future a little clearer, a little further out things are much clearer (imho) then what is going to happen over the next couple of months.
I live in the Seattle area, Redmond to be precise.
Real Estate area 520, West Bellevue, as rich as any area in the U.S.,has 14 months of supply on the market right now.
This SFR is pretty much at the bottom of the market in area 520:
Windermere Real Estate
I bought my first house right across the street from that place back in 1987 for $106,500. Not much moving there at this time but there are still some sales. The $ per sq ft it that place sells for asking is $620.
Cal writes:
Rob,
I think April sales in Ventura won't be so bad,...
Also Ventura listings have been leveling off and even dropping in many areas. I think the big brokerages are telling sellers to wait it out.
Yeah, but why is the question. For well more than a year half the inventory hasn't really been "for sale" as much as "make me rich, please." They still need to be sold and are only off the listings so as to reposition. There's another reason inventory is dropping; the new owners (the bank) aren't renewing listings until they get the paperwork processed. Finally anecdotal but through research nonetheless, I'm seeing easily twice as many "For Sale" signs in the yard as listings I can find in the database(s). (Las Posas Estates).
Nice post EBGuy.
Check out those big windows over the granite counter tops. They provide a wonderful view of the neighbor's aluminum siding... 3 feet away.
Countrywide Foreclosures (REO) Blog
Thought on how Countrywide could be holding less REO and not more??
Must be more aggressive/realistic pricing by the asset managers to move the REO?
SweetHomeKilla writes:
Check today's released h3 report. It says "April 17, 2008", yet the report is the same as last week and doesn't include ANY new data.
I agree with SweetHomeKilla; a Fed chart I monitor weekly is their Page 3 (
Brits know what I mean - cf The Sun, a Brit tabloid ). So far, at 8:23 EST, their Adjusted Monetary Base is exactly the same as last weeks !
http://research.stlouisfed.org/publications/usfd/page3.pdf
Separately, let me remind people once again that you can watch the additional slosh the Fed has provided by checking the slosh report daily after, say 10 am Eastern:
The Slosh Report
$107B average slosh and counting ( versus $30B last Aug)
-K
Wow, the slowest March since records began in 1988? Back then I was a long-haired punk, chain smoking Marlboros, and hanging out in metal clubs. Lot of water under that bridge.
Maybe the geniouses at DataQuick can go search for old paper records in a Bay Area warehouse to give more historical context to this housing crash.
A new career field is born, "forensic bubble economist."
Thought on how Countrywide could be holding less REO and not more??
Um, maybe they are lying scumbuckets?
Not that anyone in CFC would commit fraud, of course. We all know that those FBI investigations and class action lawsuits are just due to a bunch of bitter, angry folks.
SweetHomeKilla,
I agree with you that TAF has been maxed out and fully utilized (not sure what ipodius was getting at?) Although, note that the last TSLF auction had a bid to cover of .68 so things are (temporarily?) slowing down at the 'great Treasury swap meet'.
Well, the Fed did sell $12 billion more of its Treasuries last week. Not that they can sustain that type of sell off for more than a year.
I have several friends who have been waiting out the bubble and want to buy in decent areas in San Francisco or the peninsula around Stanford. During the last month they have all made offers and in every single case they were outbid by a dozen people half of whom had no contingencies. If you look at the median household income, it is ~$100K in these towns, but the home prices are >$1M. So what's going on? I've been told that many buyers have large down payments (~$500K) from company stock options or equity in their current homes. Does anyone know where to find data to verify or debunk this claim? Thanks in advance.
dataquick is so late to the game here....i call myself portland refugee for a reason....we lived in SF & Marin....
we lost....i repeat LOST 33% on the Marin house and 10% on the SF house....we did not buy at the peak.....
those defending SF are wrong...our house was in Noe Valley...hugely desirable until credit crisis hit
talked with someone yesterday who moved east from LV.
Bought his place in about 2005 for $425K and finally sold it last fall for $350, just to have it off from around his neck.
Curious,
That is true in many cases. A lot of people made a boat load of dough during the 90s via stock options, etc.
Its not uncommon to see someone making 100K per year with 500K-1Mil. in liquid assets.
Due to the high cost of living, it typical to see average incomes in the 150K range....
If you look at the median household income, it is ~$100K in these towns, but the home prices are >$1M. So what's going on?
Median income figures include the "peons" and retired persons.
Peons are not in the market for the few houses that come up for sale in the Peninsula (and retired persons are the ones who bought in when prices were an order of magnitude less).
GOOG went up $75 PER SHARE in after hours today. There are 5000 or so peeps at GOOG with substantial stock ownership. Many of them are looking at houses in the area. Do The Math.
Troy,
The bulk of GOOG's current employees only have a few hundred shares - nowhere near enough to make a damn bit of difference.
The number of employees with tens of thousands or more shares number in the hundreds. Most in this group got their shares pre-IPO and have bought/upgraded their homes already.
Wow, I never thought I'd hear anyone describe San Leandro as lovely. Less of a slum than Oakland, sure, but lovely? Charmless marginal neighborhoods that have had big appreciation are the ones that I expect to have the biggest drops in property values when all this is done.
For non-bay area folks, San Leandro is a 1950's and 1960 vintage suburb that is mostly made up of 1 story stucco houses on 6000 square foot lots that are bare of landscaping (but feature above ground power lines to make up for this defect). It is nicer than Oakland in that it is less crime ridden, but so is Detroit.
Another data point: 94301, a privileged area of Mid Pen but not like Woodside or Atherton or Los Altos Hills. Two houses near us - one at $1400 per sqft and the other at $1500 per sqft. Both of these houses were around 1000 sqft on small lots. I have posted this before but the commenters were doing Bay Area prices so I couldn't resist.
The area on the northern border of Santa Clara Co and the souther border of San Mateo Co are still sellers market. Maybe Goog is affecting these areas?
My rental house just north of Campbell and south of Santana Row rented in two days with 5 offers. Got more than asking rent.
Interesting Times!
Moody's Investors Service placed its long-term ratings on Merrill Lynch and its subsidiaries on review for downgrade.
Moody's said the review is in response to continued deteriorating conditions in the mortgage market and the increased expected losses on the New York-based firm's portfolio of super-senior CDO's and related guarantor hedges.
Markdowns on these positions and additions to counterparty credit reserves were a major contributor to the $2 billion loss Merrill Lynch reported for the first quarter on Thursday.
Moody's forecasts potential further markdowns of about $6 billion beyond the charges recognized by Merrill Lynch in the past three quarters. This forecast, combined with the first quarter loss, means that improvements in the company's most important capital ratios will be delayed.
According to Isda, 37% of non-listed derivatives are not subject to collateral agreements.
Money Moves
Given a lack of visibility into counterparty risk, many CFOs are scrutinizing how they are investing precious excess cash. Investor focus has shifted from yield to risk, says Sarah Jones, co-head of liquidity and investment products at JP Morgan Treasury and Securities Services.
Driving this is the discovery that short-term cash funds and even some money-market funds an investment heretofore thought highly liquid are exposed to structured investment vehicles (SIVs) that purchased toxic mortgage-backed securities and collateralized debt obligations. CFOs are shedding investments in funds with SIV exposure that don't offer complete transparency or daily liquidity.
In August 2007, Ethan Manuel, treasurer at $800 million Mentor Graphics, had migrated the company's short-term investments from asset-backed paper to money-market funds to maintain liquidity while gaining a bit on the return. He switched back to treasuries and commercial paper last November. "We went away from money-market funds, because we weren't sure if there would be write-downs or liquidity concerns," says Manuel. "Right now, we're being very careful." K.M.K.
Taking the Measure of Your Banks
Given the rockiness in the financial sector, CFOs would be remiss if they didn't question the stability of their banking partners. However, determining just how strong a specific bank is can take some doing.
To evaluate large banks' capital adequacy, many analysts look at "tangible common equity," a measure of net worth relative to assets, says Brent Christ, an analyst with Fox-Pitt Kelton. Tangible common equity, a non-GAAP measure, is common shareholders' equity, less intangibles and goodwill. The ratio of TCE to assets (less goodwill and intangibles) is generally considered more healthy if it is at least 6 percent for smaller banks and 4 percent for larger ones, Christ says.
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OCCs Quarterly Report on Bank Derivatives Activities
Third Quarter 2007
http://www.occ.treas.gov/ftp/release/2007-137a.pdf
Derivatives activity in the U.S. banking system is dominated by a small group of large financial institutions. Five
large commercial banks represent 97% of the total industry notional amount, 78% of total trading revenues and
87% of industry net current credit exposure.
The first step in measuring credit exposure in derivative contracts involves identifying those contracts where a
bank would lose value if the counterparty to a contract defaulted today. The total of all contracts with positive
value (i.e., derivatives receivables) to the bank is the gross positive fair value (GPFV) and represents an initial
measurement of credit exposure. The total of all contracts with negative value (i.e., derivatives payables) to
the bank is the gross negative fair value (GNFV) and represents a measurement of the exposure the bank poses
to its counterparties.
A banks net current credit exposure across all counterparties will therefore be the sum of the gross positive fair
values for counterparties lacking legally certain bilateral netting arrangements (this may be due to the use of
non-standardized documentation or jurisdiction considerations) and the bilaterally netted current credit
exposure for counterparties with legal certainty regarding the enforceability of netting agreements.
This net current credit exposure is the primary metric used by the OCC to evaluate credit risk in bank
derivatives activities. A more risk sensitive measure of credit exposure would also consider the value of
collateral held against counterparty exposures. While banks are not required to report collateral held against
their derivatives positions in their Call Reports, they do report collateral in their published financial statements.
Notably, large trading banks tend to have collateral coverage of 30-40% of their net current credit exposures
from derivatives contracts.
Net current credit exposure for U.S. commercial banks increased $53 billion in the third quarter to $252 billion.
At the end of the third quarter, legally enforceable netting agreements allowed banks to reduce the gross credit
exposure (GPFV) of $1.6 trillion by 84% to $252 billion in net current credit exposure
People here are painting both oakland and san leandro in broad strokes,which is misleading.Parts of san leandro were built in the 20's and 30's and these established neighborhoods can be quite nice.Oakland is a city of neighborhoods,and even excluding the montclair district some neighborhoods are as nice as any middle class area in the bay area.Of course other parts of oakland are contested territory,or so gang infested that they resemble baghdad...there is a lot of older housing stock in oakland that has been rehabbed over the last few years and if the city government could ever become as functional as ozzie osborne's family it would be a wonderful place.
Peconic Bay and Winston
Continuing on what Tom Stone said -- you're both right. I live in the neighborhood that Peconic Bay describes, in the north part of town off 580. Houses here were built in the 1920's-1940's, attractive architecture (Tudors and the like) and well kept houses and yards. I love the neighborhood. My lot is only 6500 square feet, but I like it that way -- who wants a yard to take care of? I have 3 bedrooms, 1500 sq ft, a deck and a small lawn in my back yard and the climate is perfect here. A lot of couples in their late 20's & 30's have been moving here and having kids (like me & my wife) -- it's stroller city. I moved here in 2003 so to you I might be one of the yuppies for all I know ( but I drive a Corolla, so probably not ). The city government seems to have their act together for the most part.
To answer your question Peconic Bay -- no, it hasn't gotten that yuppified. We've got a couple good coffeehouses and a couple good restaurants, but that's about it. The city tried to get a Trader Joes to come to downtown when another supermarket closed, and a Trader Joe's rep said there weren't enough of their demographic here. They specificially said not there weren't enough college graduates! I mean, they can think it, sure, but I couldn't believe they actually said it out loud....
Other parts of town -- um.... aren't far off from Winston's description. But the great thing about large parts of town being blue collar is that I can actually find parking at the BART station in the morning without getting up before the crack of dawn. So there.
neil | Homepage | 04.17.08 - 5:33 pm wrote:
People have realized the theater is on fire.
You'll probably enjoy this risk management note ...
Somebody Turn on the Lights
Enjoy the ride!
Print First Ask Questions Later.
Ipodius, get your facts straight:)
SweetHomeKilla @ 5:25 pm
Just as a point of clarity sweet, I was referencing the TSLF in my last comments on the Fed, and mentioned how that window's bids were actually down. I said nothing about the TAF. The TSFL servers a different customer, and that's the one everyone here generally has their panties in a bunch about.
Yeah. There are plenty of people in the Bay Area still doing fine. There are many companies thriving or at least holding the line. The directors and Veeps from those companies all want to live in Palo Alto and Los Gatos (etc.) Those places will hold up longer than the rest, and some neighborhoods will only fall in the most dire of circumstances. I still expect them to fall, but it isn't as certain as, say, Hayward.