In all seriousness, I'm literally laughing at the prices in the "less-affluent" neighborhoods in CA. Just goes to show you how ridiculous the situation got out there. Even now, prices look to be at least double where they probably should be and will be. The game of greater fool always ends, which means the dumbass bank that made the last loan will be saddled with all of the prior speculation. Ironic, isn't it, given that all of the banks that helped fuel the bubble (making huge fees in the process) will of course all be stuck with those same homes in the long run, and those homes will be worth about $0.40 on the dollar.
Its fuuny that you still see people who are just trying to wait out the market. I know a guy whose has 4 homes in vegas and he thinks that he will be able to sell them for what he bought them for. He can't walk away because he used his own house as leverage. A lot of people are teetering on the edge, I suspect.
Tim, I think I know the same guy!!! Most likely there are a lot of those guys, is your guy a Realtor too? I spoke with his wife in October 2006 and asked if they would buy anymore homes, she replied "If the bank would lend us more we would buy as many as we could".
--
Foreclosures are overwhelmingly a price decline phenomenon. Higher price home had larger % equity and hence require a bigger price decline. But some high price homeowners HELOCed themselves to the hilt (I know one in PVE who went 95% so that he can default if prices fall too much; he didn't need the money and put it in the bank).
Lenders became stupid as hell because they were not lending their own money and were essentially engaging in a criminal activity by making these loans (screwing someone down the chain). Pushing Debt was more profitable than Pushing Drugs and it is legal.
The real economic problem in America is a moral problem. That is what is to be expected when Crooks take full control of the economy and the political system.
The flipper featured in this story had 11 homes that went into foreclosure!
I wonder how much of the current foreclosure wave is from the collapse of multi-property speculators. Knowing that percentage would be valuable towards our understanding of the crisis.
The flipper featured in this story had 11 homes that went into foreclosure!
I wonder how much of the current foreclosure wave is from the collapse of multi-property speculators. Knowing that percentage would be valuable towards our understanding of the crisis.
Specuvestor participation in SoCal's high-end has always been extensive. People were shocked (SHOCKED) when Montecito mansions got pounded in the early Nineties. Can't imagine why it wouldn't unfold that way again.
Financial market turmoil underscores the need for "generous" capital cushions, and banks need to actively raise money as needed, U.S. Federal Reserve Chairman Ben Bernanke said on Thursday.
"I strongly urge financial institutions to remain proactive in their capital-raising efforts," Bernanke told a conference on bank structure and competition in Chicago.
In my middle class neighborhood of BK, NY, I tracked one individual on the deed of about 20 homes, all purchases in the past 5 years. He is continuing to take mortgages against them, increasingly turning to what looks like Private Mortgages at 12-15% interest. I was able to track some of the properties for sale through various real estate firms; they are empty and still priced over 1 million. I have to wonder how much this lone individual was responsible for the run up of this neighborhood.
I nominate Tanta to write a devastating critique of the common phrase "but the effects of once-popular loans, such as adjustable-rate and interest-only mortgages".
Newsflash: adjustable-rate mortgages are the dominant product in Canada, most of Europe, Australia, New Zealand, etc. As far as I can tell, there is VERY LITTLE correlation between adjustable rate mortgages and foreclosures.
There IS a correlation between bad underwriting (high LTV) and qualifying mortgages based on teaser rates.
Actually, I'm going to rephrase: there may be a correlation in the US, because fixed-rate mortgages are predominantly Fannie and Freddie "prime" mortgages. (Banks learned their lesson in the S&L about funding mismatches)
This would suggest the causation is high LTV / teaser rate qualification - in other words, bad underwriting.
And this is not that different than every other time around: the problem is bad underwriting and high LTV loans during property price run-ups.
As far as I can tell, there is VERY LITTLE correlation between adjustable rate mortgages and foreclosures.
That's right, GA. Bernanke took interest rate risk off the table for these clowns with risky ARMs. The wave right now are people with teaser rate resets, not interest rate resets. It's a point that's commonly missed in this debate.
Just wait until interest rates start actually rising at some point.
Its funny how fundamentals are discussed on this blog, like they matter in the real world. Hate to say it folks but we are in Bizarro World: My kind of place. After the weakening capacity utilization and industrial production numbers all data is pointing to a recession (unemployment will follow) which means that stocks are going to rally here on Bizarro World.
Specuvestor
What is the purpose of this term? They are just speculators.
Perhaps, but they perceive themselves to be so much more: e.g., "Her client, local real estate investor Keith Thai . . . . After WorldCom's downfall in 2001, Thai quit the company and systems engineering altogether to start a second career in real estate. He took classes and attended seminars. He was enthralled by Donald Trump's tale of building a real estate empire and vowed to make his own real estate fortune." Self-image is crucial to understanding an individual's behavior.
Recently the market goes up and the dollar is stable in reaction to bad economic news, has the PPT entered the fx market, or do local central banks buy USDs to prevent their currencies from rising further?
"I wonder how much of the current foreclosure wave is from the collapse of multi-property speculators. Knowing that percentage would be valuable towards our understanding of the crisis."
AngryRenter.com | Homepage | 05.15.08 - 10:12 am | #
After I saw a couple of common last names when checking the county records against homes listed on the MLS, I started searching against the last name.
Very,very,very,very common for people to own multiple properties. I think the record I found so far was about 37-38 county records for the same name,with 3 already listed as short sales...
In human affairs it is the degree that is all important. There has been a big decline in economic morality once the Financial Nazis of NYC took full control of the system. They want more and more people to get involved in immorality so that Everyone Does It defense is easy to make. Corrupt the population! That is how evildoers rule without much opposition. That is how W got re-elected.
It IS the Morality, Stupid! (That will result in the collapse of the American system after precipitous economic decline).
The Downey Savings npa's seem to be accelerating. They reached north of 13% (including mod's) in April. This supports the idea that the higher end option arm's is going bad at an increasing rate. It also points to a feedback loop: the more prices fall, the more foreclosures rise; the more foreclosures rise...
According to several of Vermont's utilities, the number of people not paying their bills is sky-rocketing. Vermont Electric Cooperative is reporting the highest increase, saying their delinquency rate is up 50 percent.
The utilities believe the recent economic downturn and rising fuel prices are to blame.
The Vermont Public Service Board says rates have not gone up significantly in the past eight years, and the state still has the lowest power rates in New England
It's amazing to watch how the stock market trades entirely on how close the next greatest EXTREME bailout measure is to passing. Like it's an invention that revolutionizes energy delivery or something useful. The anti-gravity machine.
Pathetic. We're watching degeneration occur in real time.
or do local central banks buy USDs to prevent their currencies from rising further?
Mel | 05.15.08 - 10:53 am | #
They don't buy dollars per se but rather they buy dollar denominated paper - UST, Agency MBS, etc. Same thing.
And ya - from what I hear they are buying big time. Maybe not the ECB so much but Asia is. Look at the dollar vs. yuan - over the last month or so there was a pretty abrupt halt in yuan appreciation. That was not an accident - nothing with the yuan is an accident.
But in honesty - dollar is probably oversold vs. the euro - a buddy just back from a sales trip there believes that is probably the case but still doesn't expect to see the euro below $1.40 soon. I think he's right.
He also said the customers they have in Europe are pulling out of China & buying US - not quite as cheap but less of a risk. Pretty nutz - with prices going up here soon we won't be able to afford the products we produce... then all the crap we hear here about us becoming third world will have a ring of truth to it.
Oh - and prices are going up. I'm working on surcharge letters to customers this morning - believe me, the producer price increases ARE heading to stores shelves & show rooms now. That talk about producers will eat the increases... wrong... they aren't eating it anymore unless some Fed economist figures out a way to do 'inflation bulimia'. That makes for a nice visual image.
an excerpt from this month's "letters to Miss Busta" column:
"one look at her fresh beige carpet, and I didn't even think about her lack of appliances. 13460 Red Cedar West was going to be mine, and I proceeded to seal the deal, right there, on the kitchen table..."
blogenfreude writes:
What I want to see is photos of a Luxury trashout. Homeowners ripping out Poggenpohl kitchens should be interesting.
blogenfreude | Homepage | 05.15.08 - 11:26 am | #
With stainless steel prices following copper - ANYTHING is possible.
BTW a buddy of mine had four totally junked cars on his farm - sold them this last week for $600 each just for the scrap metal - they were parted out long ago. Plus the scrap dealer did the pick up/haul away for free. He said they are turning that part of rural America upside down and shaking it looking for stuff to fall out (and it is). This was W PA & E OH.
Looks like only nice clean yard suburbanites will need the stimulus checks... rural America just needs to keep the phone number of the junk dealers handy. At this rate there will be nothing left but the 'blocks' the cars used to sit on.
dryfly - what are your thoughts on the recent quake in china. Do you think the resources expended to deal with the crisis affect their purchases of US paper?
--
"Pathetic. We're watching degeneration occur in real time."
barely,
I could have told you years ago. Normal outcome of the process that has been underway for dozen plus years.
Evildoers (Greenspan, Bush & Bernanke) as top leaders and Crooks completely in-charge. Politicians do what Crooks want as long as people can be kept under control, or in line.
What will ultimately matter isn't necessarily that producers will TRY to pass on costs to customers but whether they'll be successful. I think the producers of discretionary goods will have a difficult time doing so (just the opposite of food and gas). Wages have stayed flat, and I fully expect them to decrease as older, higher-paid employees are laid off and become willing to work for less. I've already seen numerous occurrences of this.
Vermont has a lot of elderly borderline poor people living on Social Security and maybe a few bucks of fixed income.
They spend a larger than average portion of their budgets on winter heat. They tend to be large people, so they spend more than average on food.
They are basically trapped. They don't have the money, and they are too fat, to move away somewhere warmer.
You might think it's impossible for an elderly fat person to starve. But not true. Next winter, unless some of these people get a bailout, they will freeze and starve.
The utilities have no mercy. They will cut them off if they fall too far behind.
Most of Vermont, NH and ME are becoming places of severe poverty. You have to drive around there to see it.
John McCain envisions that by 2013, the Iraq War will be won but the threat from the Taliban in Afghanistan won't yet be eliminated, even though Osama bin Laden will have been captured or killed. McCain's speech was unusual -- and somewhat risky -- in that it lays out benchmarks on which he could be judged.
"one look at her fresh beige carpet, and I didn't even think about her lack of appliances. 13460 Red Cedar West was going to be mine, and I proceeded to seal the deal, right there, on the kitchen table..."
"Dear Renthouse letters. I am an RE broker in a growing Inland Empire community. I never thought something like this would happen to me until..."
"OC/LA rent increases near 8-year low
May 14th, 2008, 1:41 pm · 64 Comments · posted by Mary Ann Milbourn
Aprils Consumer Price Index showed a continued slide in the SoCal rental market, with rents rising 4.2% from April 2007, the lowest annual increase since September 2000, according to the numbers crunchers at the U.S. Bureau of Labor Statistics. A year ago, rents were going up at a 6.4% pace.
Landlords in the Los Angeles-Orange County-Riverside area, however, still were raising rents. In 1995, at the height of the last big recession, rents declined at a 0.4% annual rate.
Annual rent increases for homeowners renting out their house were 3.6% higher in April than in April 2007. Last year, the so-called owners equivalent rent of a primary residence grew at a 6% pace in April. The price overall to keep a roof over your head (minus purchase costs) rose 2.5% over the last year, the slowest rate since March 2004 when it was 2%."
(All asterisks mine.)
The whole US gasoline sector - ie refining, distribution and retail - is currently experimenting with a radically new business model called "selling every gallon at between break-even and a loss".
So how many million dollar places can the USA afford? And from the article, who would think of multiple million dollar homes as rentals? Call me Horatio,...
There are more things in heaven and earth, Horatio,
Than are dreamt of in your philosophy.
MistaB we already been there - the message we got back was: then accept fewer orders & lower sales - we will not sell at these loss levels anymore. I'm hearing that all over - heck one of the largest Tier One suppliers to automotive (ArvinMeritor) announced they were sending their OE customers 'surcharges' instead of 'price downs'... unless you are in automotive you have no idea ow big a sea change that is. HUGE.
Its about time too - should have been doing that for years... all the way through to the consumer. Pay it or make do with less. If you can't afford gas at these prices then drive less. Understand that at least half of all trips are discretionary - they don't need to make them. Same applies with almost everything most all of us buy.
The prices aren't rolling back, instead the capacity and output is adjusting to demand at these new price breaks. It had to happen.
And the foreigners can't give it away anymore either - their gov'ts are subsidizing their currencies as much as they can and still the dollar is weak.
Logging was a big industry for Vermont, NH and ME. But now the markets for logging (newsprint, lumber) have declined and the costs to haul and process pulp and lumber is very energy-intensive. So logging has fallen off the table, and there's less work to go round.
DSL- double yikes! Their NPA have gone from just barely over 1% a year ago to over 13% today. I actually do find that a bit shocking. That is a pretty ugly illustration of what is coming down the pike.
Most of Vermont, NH and ME are becoming places of severe poverty.
Huh? Not in NH that I've seen. Lots of Yankee ingenuity up here, and thrift. We burn wood from our lots for heat, and grow our own veggies. Property taxes are a killer, but still home prices are holding up well and employment isn't too bad. I've heard lots about poverty in VT, but not so much here in NH. Don't really hear much about Maine, except for the myriads of new laws and controls they're always passing.
Vermont is a socialist hippie paradise...that is not creating any jobs or opportunity. Did you know that Vermont is the oldest (median age) state in the union? It passed Florida recently. All of the young people have left.
Those are excellent points. While food and gas producers have been able to pass on some costs to customers, it appears their margins are still being squeezed razon-thin. As for autos, that was an area I was specifically thinking of, dryfly. I should've been more specific. Such producers won't be able to pass on costs while maintaining the same level of sales. Something has to give. It makes sense that they should pass on costs but simply sell less. Why operate at a loss (unless it's only temporary and short-lived)? I further agree with you about gas consumption. We've had cheap gas for a long time and got used to running around whenever we felt like it. Now as a nation we'll likely start thinking twice about it.
They are basically trapped. They don't have the money, and they are too fat, to move away somewhere warmer.
Ron - you having a liquid lunch this afternoon?
Excuse me - that would be rich - and 'no' I am not having a liquid lunch myself but if I read anymore of this stupidity (last two threads were full of it) then I'm pouring myself a couple big ones. Don't make me do it... we'll all regret it in the morning.
dryfly writes:
They are basically trapped. They don't have the money, and they are too fat, to move away somewhere warmer.
Ron - you having a liquid lunch this afternoon?
dryfly |
didn't write it, but a liquid lunch sounds good today, going to be very hot here in Sonoma, we along with much of the West we are having a hot spell should be good for fires is these Santa Ana winds.
Nice Lansner post on OC/LA rents. As I recall, housing prices were supposed to be supported by the increasing rents that were supposed to happen with all the increased rental competition. So much for that theory.
I guess that maybe there really WAS too much overbuilding.
I used to travel a sales territory in Maine, Vermont, the poverty there had the same look as Tennessee, just a different climate. Now its full of hippies who create nothing, and live off of goverment checks.
Nice Lansner post on OC/LA rents. As I recall, housing prices were supposed to be supported by the increasing rents that were supposed to happen with all the increased rental competition. So much for that theory.
I guess that maybe there really WAS too much overbuilding.[/I]
I'm curious well rental prices will hold up in OC and Riverside. Anecdotally, I know a couple of people who have gone from renting in OC to owning in Riverside back to renting in OC. The differential between the counties are larger for the cost of owning than renting and its harder to justify spending a couple of hours a day on the 91 to head to a rental or apartment.
OC prices will still need to drop another 20% even with rents rising but I'm curious if OC/Riverside rental rates trends will seriously diverge.
Money continues to pour into collectibles, including houses: Considering that a painting went for more than $50 million, the Kaufmann House, in Palm Springs, Calif., a 1946 Modernist landmark in glass, steel and stone designed by the architect Richard Neutra, was a veritable bargain. It was being sold by Brent Harris, an investment manager, and Beth Edwards Harris, an architectural historian, who are divorcing. The home, which was originally commissioned as a desert retreat by Edgar J. Kaufmann, the Pittsburgh department store magnate for whom Frank Lloyd Wright built Fallingwater in Pennsylvania a decade earlier, met its low $15 million estimate (or with commission, $16.8 million). After the sale, Marc Porter, Christies president in America, said the buyer, whom he declined to name, exercised an option to purchase an orchard adjacent to the property for an additional $2.1 million that includes three cacti that were a present from Frank Lloyd Wright to Mr. Kaufmann on his first visit to the home. It isnt the first time a Modernist house has been sold at auction. Over the years both Christies and Sothebys have offered such architecturally important dwellings as Mies van der Rohes Farnsworth House and a 1950 town house on East 52nd Street that Philip Johnson designed as a guest house for Blanchette Rockefeller, the wife of John D. Rockefeller III.
"Now its full of hippies who create nothing, and live off of goverment checks.
UnLucky"
F'in' hippies...making their own cheese, growing their vegetables, raising their own chickens...not participating in our wonderful system. They should be more productive, like making missiles for Raytheon, or designing anticompetitive software or something productive, like that.
There's a lot of retired, $100K annual income boomers out there who still view themselves as living on the edge. Delusional doesn't even begin to cover it. I've literally watch them bitch for half an hour over whether to get the $150 or $250 supplemental medicaid coverage.
"selling every gallon between break-even and a loss."
This could also be characterized as large refiners(eg. Exxon)lowering prices to force out independents and smaller competitors, and to expand market share.
The moment at which a 500K home was no longer considered High End was when President Clinton got rid of capitol gains for profits on RE sales up to 500K.
At any rate, that's when the 180K homes in desirable Seattle 'hoods miraculously became "worth" much, much more. It did not take long before whole neighborhoods of homes were "worth" way more than 500K.
I believe the timing in a lot of CA. was the same. Around '97, that's when the Nightmare RE Bubble started out here.
Probably not first!
Industrial production declines 0.7%, market will be up 200 by the close.
Premiering soon: "Foreclosures of the Rich and Famous."
In all seriousness, I'm literally laughing at the prices in the "less-affluent" neighborhoods in CA. Just goes to show you how ridiculous the situation got out there. Even now, prices look to be at least double where they probably should be and will be. The game of greater fool always ends, which means the dumbass bank that made the last loan will be saddled with all of the prior speculation. Ironic, isn't it, given that all of the banks that helped fuel the bubble (making huge fees in the process) will of course all be stuck with those same homes in the long run, and those homes will be worth about $0.40 on the dollar.
This is hot stuff. I suspect my mailman removed the plastic from my latest issue of "Barely Saleable".
Its fuuny that you still see people who are just trying to wait out the market. I know a guy whose has 4 homes in vegas and he thinks that he will be able to sell them for what he bought them for. He can't walk away because he used his own house as leverage. A lot of people are teetering on the edge, I suspect.
Tim, I think I know the same guy!!! Most likely there are a lot of those guys, is your guy a Realtor too? I spoke with his wife in October 2006 and asked if they would buy anymore homes, she replied "If the bank would lend us more we would buy as many as we could".
--
Foreclosures are overwhelmingly a price decline phenomenon. Higher price home had larger % equity and hence require a bigger price decline. But some high price homeowners HELOCed themselves to the hilt (I know one in PVE who went 95% so that he can default if prices fall too much; he didn't need the money and put it in the bank).
Lenders became stupid as hell because they were not lending their own money and were essentially engaging in a criminal activity by making these loans (screwing someone down the chain). Pushing Debt was more profitable than Pushing Drugs and it is legal.
The real economic problem in America is a moral problem. That is what is to be expected when Crooks take full control of the economy and the political system.
Jas
The flipper featured in this story had 11 homes that went into foreclosure!
I wonder how much of the current foreclosure wave is from the collapse of multi-property speculators. Knowing that percentage would be valuable towards our understanding of the crisis.
No don't think so. He is unemployed but works with computers. scary how common this is.
The $1.8 million is just a "starter foreclosure".
Shnaps writes:
...latest issue of "Barely Saleable".
I think this was in the last issue of "Renthouse"
Would that make CR "renthouse forums"?
The flipper featured in this story had 11 homes that went into foreclosure!
I wonder how much of the current foreclosure wave is from the collapse of multi-property speculators. Knowing that percentage would be valuable towards our understanding of the crisis.
Specuvestor participation in SoCal's high-end has always been extensive. People were shocked (SHOCKED) when Montecito mansions got pounded in the early Nineties. Can't imagine why it wouldn't unfold that way again.
Guys, what's in your pillowcase?
Emails to CR = Rentouse letters:
"I told him to stop, that he was going too far... He then took out his second No Doc Mortgage loan."
Financial market turmoil underscores the need for "generous" capital cushions, and banks need to actively raise money as needed, U.S. Federal Reserve Chairman Ben Bernanke said on Thursday.
"I strongly urge financial institutions to remain proactive in their capital-raising efforts," Bernanke told a conference on bank structure and competition in Chicago.
Bernanke urges banks to raise capital if needed
| Reuters
Find some greater fools fast.
The characteristics of Orange County fit in the alt-a universe. We know that the alt-a debacle is approximately 12 months behind subprime.
Watch out ... here comes Laguna Niguel, Irvine, Anaheim Hills, etc ... KAPUT!
It sounds like Bernanke is shocked to find out that banks are doing all their funding through the Fed these days.
Specuvestor
What is the purpose of this term? They are just speculators.
yours in Christ,
Isamu
In my middle class neighborhood of BK, NY, I tracked one individual on the deed of about 20 homes, all purchases in the past 5 years. He is continuing to take mortgages against them, increasingly turning to what looks like Private Mortgages at 12-15% interest. I was able to track some of the properties for sale through various real estate firms; they are empty and still priced over 1 million. I have to wonder how much this lone individual was responsible for the run up of this neighborhood.
jas jain writes America is a moral problem.
morality is a human condition.
the lion does'nt feel it
nor the cougar
even the polar bear
only the eaten feel moral outrage.
Heh. When did $800,000 homes (which should require a yearly income of about $200,000 to support) become not-high-end?
Long way to go, folks.
Cheers,
prat
I nominate Tanta to write a devastating critique of the common phrase "but the effects of once-popular loans, such as adjustable-rate and interest-only mortgages".
Newsflash: adjustable-rate mortgages are the dominant product in Canada, most of Europe, Australia, New Zealand, etc. As far as I can tell, there is VERY LITTLE correlation between adjustable rate mortgages and foreclosures.
There IS a correlation between bad underwriting (high LTV) and qualifying mortgages based on teaser rates.
Actually, I'm going to rephrase: there may be a correlation in the US, because fixed-rate mortgages are predominantly Fannie and Freddie "prime" mortgages. (Banks learned their lesson in the S&L about funding mismatches)
This would suggest the causation is high LTV / teaser rate qualification - in other words, bad underwriting.
And this is not that different than every other time around: the problem is bad underwriting and high LTV loans during property price run-ups.
Tanta? Someone?
this is the one I like
Bofa REO
Bank of America | Real Estate Center | Find a Bank-Owned Property
As far as I can tell, there is VERY LITTLE correlation between adjustable rate mortgages and foreclosures.
That's right, GA. Bernanke took interest rate risk off the table for these clowns with risky ARMs. The wave right now are people with teaser rate resets, not interest rate resets. It's a point that's commonly missed in this debate.
Just wait until interest rates start actually rising at some point.
200g's supports 800g note?
based on praetorian's theories(and he reads this site) we have a long, Long way to go.
Its funny how fundamentals are discussed on this blog, like they matter in the real world. Hate to say it folks but we are in Bizarro World: My kind of place. After the weakening capacity utilization and industrial production numbers all data is pointing to a recession (unemployment will follow) which means that stocks are going to rally here on Bizarro World.
Specuvestor
What is the purpose of this term? They are just speculators.
Perhaps, but they perceive themselves to be so much more: e.g., "Her client, local real estate investor Keith Thai . . . . After WorldCom's downfall in 2001, Thai quit the company and systems engineering altogether to start a second career in real estate. He took classes and attended seminars. He was enthralled by Donald Trump's tale of building a real estate empire and vowed to make his own real estate fortune." Self-image is crucial to understanding an individual's behavior.
Yours in Freud,
The realtor who said prices would go back to 15 years ago is part of a local realtor dynasty. Volatility is good for realtors.
I see many empty "800K" homes. Zillow shows accelerating price declines in my part of Loudoun County.
There's a monster brand new REO in Vienna, VA (2403 HUNTER MILL) 10,000 sq ft on a 2 acre lot listed at $2.5M.
Before the "GMAC Bank Owned" sign, the builder had a "Still time to customize" sign out front. I guess time ran out.
"It sounds like Bernanke is shocked to find out that banks are doing all their funding through the Fed these days."
I think he is telling them sell your Mom into prostitution if you have to I want my damn treasuries back. He is the greater fool.
"We're very close," said Senate Banking Committee Chairman Christopher Dodd on Fox Business Network. "We're very, very close."
yippyittyDooDa
"If the bank would lend us more we would buy as many as we could". Kool-aid drinkers driving into a concrete wall a 80 mph.
Recently the market goes up and the dollar is stable in reaction to bad economic news, has the PPT entered the fx market, or do local central banks buy USDs to prevent their currencies from rising further?
What kind of views does one have from a house in Corona? The freeway? The smogline? A million bucks in CORONA? Good Lord.
--
"Montecito mansions got pounded in the early Nineties."
Looking to buy one once depression is in full swing after 80%+ decline. I used to hike in the area and it is really nice. Few good restaurants too.
Jas
"I wonder how much of the current foreclosure wave is from the collapse of multi-property speculators. Knowing that percentage would be valuable towards our understanding of the crisis."
AngryRenter.com | Homepage | 05.15.08 - 10:12 am | #
After I saw a couple of common last names when checking the county records against homes listed on the MLS, I started searching against the last name.
Very,very,very,very common for people to own multiple properties. I think the record I found so far was about 37-38 county records for the same name,with 3 already listed as short sales...
Chris
Jas,
I would love to see you in Montecito, and I'm sure Oprah would, too.
--
BabyJas,
In human affairs it is the degree that is all important. There has been a big decline in economic morality once the Financial Nazis of NYC took full control of the system. They want more and more people to get involved in immorality so that Everyone Does It defense is easy to make. Corrupt the population! That is how evildoers rule without much opposition. That is how W got re-elected.
It IS the Morality, Stupid! (That will result in the collapse of the American system after precipitous economic decline).
Jas
The Downey Savings npa's seem to be accelerating. They reached north of 13% (including mod's) in April. This supports the idea that the higher end option arm's is going bad at an increasing rate. It also points to a feedback loop: the more prices fall, the more foreclosures rise; the more foreclosures rise...
Expired
Utilities Say Customers Aren't Paying Their Bills
Montpelier, Vermont - May 15, 2008
Another sign of a possible recession.
According to several of Vermont's utilities, the number of people not paying their bills is sky-rocketing. Vermont Electric Cooperative is reporting the highest increase, saying their delinquency rate is up 50 percent.
The utilities believe the recent economic downturn and rising fuel prices are to blame.
The Vermont Public Service Board says rates have not gone up significantly in the past eight years, and the state still has the lowest power rates in New England
4shzl,
I know few Crooks who live there. It is a popular sanctuary for Crooks. Hope to find a secluded place.
Jas
It's amazing to watch how the stock market trades entirely on how close the next greatest EXTREME bailout measure is to passing. Like it's an invention that revolutionizes energy delivery or something useful. The anti-gravity machine.
Pathetic. We're watching degeneration occur in real time.
My landlord, who wanted to emulate Trump, has ten homes in foreclosure.
or do local central banks buy USDs to prevent their currencies from rising further?
Mel | 05.15.08 - 10:53 am | #
They don't buy dollars per se but rather they buy dollar denominated paper - UST, Agency MBS, etc. Same thing.
And ya - from what I hear they are buying big time. Maybe not the ECB so much but Asia is. Look at the dollar vs. yuan - over the last month or so there was a pretty abrupt halt in yuan appreciation. That was not an accident - nothing with the yuan is an accident.
But in honesty - dollar is probably oversold vs. the euro - a buddy just back from a sales trip there believes that is probably the case but still doesn't expect to see the euro below $1.40 soon. I think he's right.
He also said the customers they have in Europe are pulling out of China & buying US - not quite as cheap but less of a risk. Pretty nutz - with prices going up here soon we won't be able to afford the products we produce... then all the crap we hear here about us becoming third world will have a ring of truth to it.
Oh - and prices are going up. I'm working on surcharge letters to customers this morning - believe me, the producer price increases ARE heading to stores shelves & show rooms now. That talk about producers will eat the increases... wrong... they aren't eating it anymore unless some Fed economist figures out a way to do 'inflation bulimia'. That makes for a nice visual image.
What I want to see is photos of a Luxury trashout. Homeowners ripping out Poggenpohl kitchens should be interesting.
an excerpt from this month's "letters to Miss Busta" column:
"one look at her fresh beige carpet, and I didn't even think about her lack of appliances. 13460 Red Cedar West was going to be mine, and I proceeded to seal the deal, right there, on the kitchen table..."
blogenfreude writes:
What I want to see is photos of a Luxury trashout. Homeowners ripping out Poggenpohl kitchens should be interesting.
blogenfreude | Homepage | 05.15.08 - 11:26 am | #
With stainless steel prices following copper - ANYTHING is possible.
BTW a buddy of mine had four totally junked cars on his farm - sold them this last week for $600 each just for the scrap metal - they were parted out long ago. Plus the scrap dealer did the pick up/haul away for free. He said they are turning that part of rural America upside down and shaking it looking for stuff to fall out (and it is). This was W PA & E OH.
Looks like only nice clean yard suburbanites will need the stimulus checks... rural America just needs to keep the phone number of the junk dealers handy. At this rate there will be nothing left but the 'blocks' the cars used to sit on.
dryfly - what are your thoughts on the recent quake in china. Do you think the resources expended to deal with the crisis affect their purchases of US paper?
--
"Pathetic. We're watching degeneration occur in real time."
barely,
I could have told you years ago. Normal outcome of the process that has been underway for dozen plus years.
Evildoers (Greenspan, Bush & Bernanke) as top leaders and Crooks completely in-charge. Politicians do what Crooks want as long as people can be kept under control, or in line.
Jas
dryfly,
What will ultimately matter isn't necessarily that producers will TRY to pass on costs to customers but whether they'll be successful. I think the producers of discretionary goods will have a difficult time doing so (just the opposite of food and gas). Wages have stayed flat, and I fully expect them to decrease as older, higher-paid employees are laid off and become willing to work for less. I've already seen numerous occurrences of this.
Check out the link to find out who is getting foreclosed in Hampton.
Vermont has a lot of elderly borderline poor people living on Social Security and maybe a few bucks of fixed income.
They spend a larger than average portion of their budgets on winter heat. They tend to be large people, so they spend more than average on food.
They are basically trapped. They don't have the money, and they are too fat, to move away somewhere warmer.
You might think it's impossible for an elderly fat person to starve. But not true. Next winter, unless some of these people get a bailout, they will freeze and starve.
The utilities have no mercy. They will cut them off if they fall too far behind.
Most of Vermont, NH and ME are becoming places of severe poverty. You have to drive around there to see it.
OT
John McCain envisions that by 2013, the Iraq War will be won but the threat from the Taliban in Afghanistan won't yet be eliminated, even though Osama bin Laden will have been captured or killed. McCain's speech was unusual -- and somewhat risky -- in that it lays out benchmarks on which he could be judged.
"one look at her fresh beige carpet, and I didn't even think about her lack of appliances. 13460 Red Cedar West was going to be mine, and I proceeded to seal the deal, right there, on the kitchen table..."
"Dear Renthouse letters. I am an RE broker in a growing Inland Empire community. I never thought something like this would happen to me until..."
And yet...
"OC/LA rent increases near 8-year low
May 14th, 2008, 1:41 pm · 64 Comments · posted by Mary Ann Milbourn
Aprils Consumer Price Index showed a continued slide in the SoCal rental market, with rents rising 4.2% from April 2007, the lowest annual increase since September 2000, according to the numbers crunchers at the U.S. Bureau of Labor Statistics. A year ago, rents were going up at a 6.4% pace.
Landlords in the Los Angeles-Orange County-Riverside area, however, still were raising rents. In 1995, at the height of the last big recession, rents declined at a 0.4% annual rate.
Annual rent increases for homeowners renting out their house were 3.6% higher in April than in April 2007. Last year, the so-called owners equivalent rent of a primary residence grew at a 6% pace in April. The price overall to keep a roof over your head (minus purchase costs) rose 2.5% over the last year, the slowest rate since March 2004 when it was 2%."
(All asterisks mine.)
OC/LA rent increases near 8-year low - Lansner on Real Estate : The Orange County Register
Sebastia
Mista B
The whole US gasoline sector - ie refining, distribution and retail - is currently experimenting with a radically new business model called "selling every gallon at between break-even and a loss".
So how many million dollar places can the USA afford? And from the article, who would think of multiple million dollar homes as rentals? Call me Horatio,...
There are more things in heaven and earth, Horatio,
Than are dreamt of in your philosophy.
MistaB we already been there - the message we got back was: then accept fewer orders & lower sales - we will not sell at these loss levels anymore. I'm hearing that all over - heck one of the largest Tier One suppliers to automotive (ArvinMeritor) announced they were sending their OE customers 'surcharges' instead of 'price downs'... unless you are in automotive you have no idea ow big a sea change that is. HUGE.
Its about time too - should have been doing that for years... all the way through to the consumer. Pay it or make do with less. If you can't afford gas at these prices then drive less. Understand that at least half of all trips are discretionary - they don't need to make them. Same applies with almost everything most all of us buy.
The prices aren't rolling back, instead the capacity and output is adjusting to demand at these new price breaks. It had to happen.
And the foreigners can't give it away anymore either - their gov'ts are subsidizing their currencies as much as they can and still the dollar is weak.
Logging was a big industry for Vermont, NH and ME. But now the markets for logging (newsprint, lumber) have declined and the costs to haul and process pulp and lumber is very energy-intensive. So logging has fallen off the table, and there's less work to go round.
David-
DSL- double yikes! Their NPA have gone from just barely over 1% a year ago to over 13% today. I actually do find that a bit shocking. That is a pretty ugly illustration of what is coming down the pike.
Most of Vermont, NH and ME are becoming places of severe poverty.
Huh? Not in NH that I've seen. Lots of Yankee ingenuity up here, and thrift. We burn wood from our lots for heat, and grow our own veggies. Property taxes are a killer, but still home prices are holding up well and employment isn't too bad. I've heard lots about poverty in VT, but not so much here in NH. Don't really hear much about Maine, except for the myriads of new laws and controls they're always passing.
There are plenty of poor people in Maine (Taxationland). Always have been plenty.
Vermont is a socialist hippie paradise...that is not creating any jobs or opportunity. Did you know that Vermont is the oldest (median age) state in the union? It passed Florida recently. All of the young people have left.
Population Estimates
They are basically trapped. They don't have the money, and they are too fat, to move away somewhere warmer.
Ron - you having a liquid lunch this afternoon?
dan and dryfly,
Those are excellent points. While food and gas producers have been able to pass on some costs to customers, it appears their margins are still being squeezed razon-thin. As for autos, that was an area I was specifically thinking of, dryfly. I should've been more specific. Such producers won't be able to pass on costs while maintaining the same level of sales. Something has to give. It makes sense that they should pass on costs but simply sell less. Why operate at a loss (unless it's only temporary and short-lived)? I further agree with you about gas consumption. We've had cheap gas for a long time and got used to running around whenever we felt like it. Now as a nation we'll likely start thinking twice about it.
They are basically trapped. They don't have the money, and they are too fat, to move away somewhere warmer.
Ron - you having a liquid lunch this afternoon?
Excuse me - that would be rich - and 'no' I am not having a liquid lunch myself but if I read anymore of this stupidity (last two threads were full of it) then I'm pouring myself a couple big ones. Don't make me do it... we'll all regret it in the morning.
dryfly writes:
They are basically trapped. They don't have the money, and they are too fat, to move away somewhere warmer.
Ron - you having a liquid lunch this afternoon?
dryfly |
didn't write it, but a liquid lunch sounds good today, going to be very hot here in Sonoma, we along with much of the West we are having a hot spell should be good for fires is these Santa Ana winds.
"Sounds like Muffy is having some problems....Muffy is not good with problems."
Don't make me do it... we'll all regret it in the morning.
HAHAHAHA!!! I think this blog (no offense CR - we love it) is beginning to put some people into a zombie-doomsday mode.
Remember 2 things: even in the depression, a lot of people did just fine.
And have you really had a bad day until you lose $1 billion in one day? (Wasn't his name Lewis in the BS calamity?)
"going to be very hot here in Sonoma, we along with much of the West we are having a hot spell should be good for fires is these Santa Ana winds."
Not dry enough yet, at least not for big ones.
OC/LA rent increases near 8-year low - Lansner on Real Estate : The Orange County Register
Nice Lansner post on OC/LA rents. As I recall, housing prices were supposed to be supported by the increasing rents that were supposed to happen with all the increased rental competition. So much for that theory.
I guess that maybe there really WAS too much overbuilding.
I used to travel a sales territory in Maine, Vermont, the poverty there had the same look as Tennessee, just a different climate. Now its full of hippies who create nothing, and live off of goverment checks.
Exurban Nation: Civilization Trembles
Follow the link if anyone would like to wish Rob Dawg their best.
Now its full of hippies who create nothing, and live off of government checks.
Why not a good part of American businesses do the same damn thing.
[I]Anonymous writes:
http://lansner.freedomblogging.c...r-fourth-month/
Nice Lansner post on OC/LA rents. As I recall, housing prices were supposed to be supported by the increasing rents that were supposed to happen with all the increased rental competition. So much for that theory.
I guess that maybe there really WAS too much overbuilding.[/I]
I'm curious well rental prices will hold up in OC and Riverside. Anecdotally, I know a couple of people who have gone from renting in OC to owning in Riverside back to renting in OC. The differential between the counties are larger for the cost of owning than renting and its harder to justify spending a couple of hours a day on the 91 to head to a rental or apartment.
OC prices will still need to drop another 20% even with rents rising but I'm curious if OC/Riverside rental rates trends will seriously diverge.
Average nationwide diesel at 4.5/gal equates to .75/per mile based on 6 mpg average fleet fuel mileage.
With average revenue per mile for big fleets in the 1.60-1.70 range, not much is left over for equipment, maintenance, salaries, etc....
something must happen(duh)soon.
check big fleets like werner, swift, schneider, fed-ex, ups.
Money continues to pour into collectibles, including houses:
Considering that a painting went for more than $50 million, the Kaufmann House, in Palm Springs, Calif., a 1946 Modernist landmark in glass, steel and stone designed by the architect Richard Neutra, was a veritable bargain. It was being sold by Brent Harris, an investment manager, and Beth Edwards Harris, an architectural historian, who are divorcing. The home, which was originally commissioned as a desert retreat by Edgar J. Kaufmann, the Pittsburgh department store magnate for whom Frank Lloyd Wright built Fallingwater in Pennsylvania a decade earlier, met its low $15 million estimate (or with commission, $16.8 million). After the sale, Marc Porter, Christies president in America, said the buyer, whom he declined to name, exercised an option to purchase an orchard adjacent to the property for an additional $2.1 million that includes three cacti that were a present from Frank Lloyd Wright to Mr. Kaufmann on his first visit to the home. It isnt the first time a Modernist house has been sold at auction. Over the years both Christies and Sothebys have offered such architecturally important dwellings as Mies van der Rohes Farnsworth House and a 1950 town house on East 52nd Street that Philip Johnson designed as a guest house for Blanchette Rockefeller, the wife of John D. Rockefeller III.
At Christie's, Bidding Is Strong for Paintings, Sculptures and Even a House - NY Times
I can't say much about passing through costs...
but I just got a candy bar from the vending machine here at work and it was $0.90.
I've never seen a candy bar so expensive. In the past, I never saw one for more than $0.75.
"Now its full of hippies who create nothing, and live off of goverment checks.
UnLucky"
F'in' hippies...making their own cheese, growing their vegetables, raising their own chickens...not participating in our wonderful system. They should be more productive, like making missiles for Raytheon, or designing anticompetitive software or something productive, like that.
F'in' hippies!
Homeschoolin' their kids! Teachin' their kids to enjoy the outdoors instead of depending on the parasitic economic entertain industry.
F'in' hippies!!!
That's entertainment industry.
F'in' hippies!!
Anonymous:
If you need a handle, I believe "F'in' hippies!!" is not being used.
There's a lot of retired, $100K annual income boomers out there who still view themselves as living on the edge. Delusional doesn't even begin to cover it. I've literally watch them bitch for half an hour over whether to get the $150 or $250 supplemental medicaid coverage.
Greediest Generation. Bar None.
dan,
"selling every gallon between break-even and a loss."
This could also be characterized as large refiners(eg. Exxon)lowering prices to force out independents and smaller competitors, and to expand market share.
rural America just needs to keep the phone number of the junk dealers handy
I've been amazed that this hadn't happened years ago.
Although most of the listing in Orange County are in the $400 to $800 thousand range, there are a number of higher end homes.
I'd love to know the moment at which a home costing nearly half of a million dollars was no longer considered "high end".
[i]I'd love to know the moment at which a home costing nearly half of a million dollars was no longer considered "high end".[/i]
March 13, 2001
The moment at which a 500K home was no longer considered High End was when President Clinton got rid of capitol gains for profits on RE sales up to 500K.
At any rate, that's when the 180K homes in desirable Seattle 'hoods miraculously became "worth" much, much more. It did not take long before whole neighborhoods of homes were "worth" way more than 500K.
I believe the timing in a lot of CA. was the same. Around '97, that's when the Nightmare RE Bubble started out here.