September 29, 2006

BUBBLETALK - September thread to discuss the epic housing meltdown underway

Post housing bubble articles here, talk about off-subject topics (in other words, don't threadjack the following threads) and have a good chat. Above all, KEEP IT CLEAN and have fun

499 comments:

1 – 200 of 499   Newer›   Newest»
blogger said...

I wanted to pull this comment out about Lereah - anyone have the full article on WSJ?

WALL STREET JOURNAL
Saturday-Sunday September 2-3, 2006
page A2
David Lereah quote from interview
"I'm hoping for prices to drop." A drop of 5% to 10% in California and southern Florida "probably would be enough to bring sales back."

blogger said...

My google ads are heating up a bit with the new colors. Thanks HP'ers for the tip money - beers are £5 here (that's about $9US)

Anonymous said...

I'm located in Austin, TX and everything I read seems to claim that although prices have increased at a higher rate than normal over the last 5 years in this market, there's no "bubble" and that the market will remain strong. (And this information is not from realtors.)

Even if it is the case that pricing in Austin is more justified than in the big bubble markets, wouldn't prices fall here if the bubbles burst dramatically elsewhere? That is, if homes were available at sane prices on the west coast, florida and elsewhere, wouldn't there be decreased demand here?

Anonymous said...

http://sos.fen-net.de/
walter.preiss/
speedjpg/ballon.jpg

Anonymous said...

It's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.

Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.

This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.

Anonymous said...

Last anon: you're jerk!

.." This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent."

Yeh, different. Same post again and again.

Just take minute , sit and think about GAINS. During high inflation and jyperinflation you'll gain worthless $$$$$.

Look for the Real purchase power and learn about supply and demand. More, more more, houses !!! Collapse in RE industry together with retailers and all this service economy will end demand for cheap (slave) labor. Look for illegals coming back!!

During depression, high crime and riots noone forigner will need a house in USA.

Anonymous said...

Now, with adjustable rates going up and a growing number of borrowers failing to make their payments, H&R Block is being forced to write off a loss of $102 million.

Analysts say that could amount to as much as 40 percent of the profits the company's mortgage business might have been expected to take in.

Some experts wonder if this is just the beginning, not only for H&R Block, but other mortgage providers.

Christopher Thornberg watches the home-lending industry for Beacon Economics.

CHRISTOPHER THORNBERG: "We're at the beginning of the breaking real estate bubble, we're not at the end, we're not near the bottom. We have a ways to go."

Thornberg expects a shakeout for the mortgage industry, but he can't predict which companies might be most vulnerable:

THORNBERG: "To some extent, this is going to be one of those things where we're just going to have to let the smoke clear to find out where the bombs have landed."

Thornberg has little sympathy for companies that he says have long been riding high on such high-risk loans.

http://marketplace.
publicradio.org/shows/
2006/08/31/AM200608313.html

Anonymous said...

Here is the full article that Keith was referring to in the WSJ. Is it possible that David Lereah has been injected with truth serum?

"Realtors Official Forecasts Declines in Home Prices"

The chief economist of the National Association of Realtors predicts that U.S. home prices will generally decline during the next few months.

The unusually bleak assessment from David Lereah, the trade group's top economist, came as the Realtors reported that their index of pending home sales dropped 7% in July. The decline shows that home shoppers continue to take their time, hoping prices will fall amid a glut of houses on the market in many parts of the country.

"I'm hoping for prices to drop," Mr. Lereah said in an interview. The Realtors normally stress the tendency of home prices to rise over the long term. But Mr. Lereah said lower prices are needed in some parts of the U.S. to lure buyers back into the market. During the past year, sales have plunged in California, southern Florida and the Washington, D.C., area, all places where prices more than doubled in the first half of this decade.

Sales have stalled partly because "the sellers are not bringing prices down fast enough," Mr. Lereah said. "They've been very stubborn." A drop of 5% to 10% in California and southern Florida "probably would be enough to bring sales back," he said.

For July, the Realtors reported that the national median home price was up 0.9% from a year earlier. But Mr. Lereah said he expects the national median to decline modestly in the next few months. That would mark the first decline since 1993. "The quicker we can get negative prices, the quicker we can get sales coming back," Mr. Lereah said.

Thomas Lawler, a housing economist in Vienna, Va., said the national median home price in this year's fourth quarter is likely to be down 3% to 4% from a year earlier.

In recent months, median prices in some areas -- including San Diego, Boston, the Virginia suburbs of Washington and parts of Florida -- already have fallen from year-earlier levels.

The pending-sales index, which equates the average pending-sales rate of 2001 to 100, registered 105.6 in July. The latest reading was down 7% from June and 16% from July 2005. The index, based on signed contracts for home sales that haven't yet been completed, has fallen nearly 18% since hitting a peak of 128.2 in August 2005.

By region, the July index was down 20% from a year earlier in the West and Midwest, 16% in the Northeast and 11% in the South.

On Wednesday, the Mortgage Bankers Association reported that its seasonally adjusted index of applications for home-purchase mortgages declined 1.6% in the week ended Aug. 25. That index -- a measure of demand for homes -- is down about 20% from a year ago.

Anonymous said...

In the especially hard-hit housing sector, P/E ratios have gone much lower than that. The stocks of homebuilders KB Home, D.R. Horton Inc., Toll Brothers Inc. and Pulte Homes Inc. trade at miserly multiples of 3.9 to 5.3.

It remains to be seen whether this is all or even most of the punishment investors in housing stocks will suffer. But it attests that any bad news yet to come on housing won't be catching those investors completely by surprise.

If a big recession is in the cards for the economy as a whole, markets will surely feel more pain. If nothing more than a moderate economic slowdown happens, on the other hand, investors could have some pleasant surprises in store.

So the outlook may come down to a very simple calculation: soft landing, good news for stocks; recession, more tough sledding ahead.

http://www.ocregister.com/
ocregister/money/columns/
article_1262956.php

Anonymous said...

RE: Arms mortgage trap

http://biz.yahoo.com/bizwk/060901/b4000001.html?.v=1

Room for rent $400./mo separate entrance in a house.

Anonymous said...

Washington - The cooling housing market could mean "a whole lot" of job cuts as construction companies, mortgage brokers, real estate agencies and landscapers start laying off legions of workers, economists say.

"By next year, it should stabilize, but for now, yes, jobs are going to be lost," said Zoltan Pozsar, an economist with Moody's Economist.com Inc.

Between early 2003 and March 2006, the housing boom created about 1.2 million jobs throughout the industry, he said.

But since spring, he added, employers not only have stopped hiring, they have slashed about 25,000 jobs.

"This is the tip of the iceberg," Pozsar said.

"There is a whole lot more [cutting] to come."
David Seiders, chief economist for the National Association of Home Builders, a trade group, agrees that job losses will spread.

As the industry thins its ranks, the U.S. economy will feel the pinch.

Any loss of construction jobs can be painful because they tend to pay high wages.

http://www.ajc.com/services
/content/business/stories/
2006/09/03/
sbizhousing0903a.html?
cxtype=rss&cxsvc=7&cxcat=6

Anonymous said...

When Mary Wagner was a girl, she passed the 1883 Mount Kemble Home every day on her way to school.

"We used to call it the Old Ladies Home,"she said.

Those were good days. Her grandfather was a baker. He owned stables, she recalled, and he built a house on Macculloch Avenue on Morristown.

The Mount Kemble Home is on Mount Kemble Avenue, perched where the two streets intersect. Never once did Mary Wagner imagine that she would be homeless at age 63 and end up moving into a room in that old yellow Victorian.

Not Mary Wagner, mother of three, once an owner of two homes, community volunteer, divorcee, owner of My Companion Dog School, certified addictions counselor for 27 years, founding board member of The Willow Tree and Mrs. Wilson's Halfway House for alcoholic women.

Never did Mary Wagner envision a total monthly income of $759 -- the amount of her disability check. At the nonprofit, private home, she will pay 30 percent of her income, she said. That's what all the women there do, no matter what their income is.

Wagner's income dwindled over time from pressures that cumulated from divorce, high taxes, a major car accident and medical problems.

Today the Mount Kemble Home is her only option in a county where the shadow of poverty is getting longer. In Morris County, affordable housing is on the decline, and waiting lists for housing vouchers, subsidized housing and even shelters are so long that people move out of state while they wait.

"It's not just me," Wagner said. "There is a horrible thing happening in this county. The fact we have people building million-dollar homes and people living in the street makes you want to ask what's happening to mankind."

Homelessness among the middle class is happening more than people like to think, experts say

"In our 2002 report, 'The State of Working New Jersey,' we looked at the supposedly booming '90s and found that real wages were lower at the end of the decade than they were at the beginning and that a lot of people were getting paid less," Shure said.

While the temptation is to think those paid less must have been working at different jobs, that is not the case.

"They were paid less for the same work,"Shure added. "So clearly there's been an erosion in security for the middle class in New Jersey. There's no question about that."

As wages have declined, Shure said, middle-class people have had to absorb increases in health care and energy costs -- and all this as housing costs have increased by more than 50 percent since the turn of the decade.

These conditions have stopped the climb up the ladder of success for many people.

Phil Van Kirk is co-director of the Affordable Harding Corp., which just opened 24 low- and moderate-income units in Harding. Many moderate income people earning $70,000 through $120,000 are stuck in their starter homes, he said.

"There's nothing available for them," he explained. Not in a market where the median selling price for a home nears $550,000 and requires an annual household income of $144,850, or a market where apartments with rents of $750 or less dropped from 20,000 to 5,000 in the past 15 years.

In fact, the middle class here is sliding down, losing ground, and sometimes is knocked off that proverbial ladder by even one crisis.

http://www.dailyrecord.com/
apps/pbcs.dll/article?
AID=/20060903/LIFE/
609030327/1004

Anonymous said...

Income fell, rates rose
For Eric Fenton, who gave up his house in June, the loss of overtime income in his telecommunications job came at the same time his mortgage payments ratcheted up.

"Since I had to get an adjustable rate loan, I watched my payments grow from $700 to $900," Mr. Fenton said in an e-mail. "And then utilities – they went from $200 to $400."

Mr. Fenton tried to sell his Dallas house but had no luck.

"My house was listed for over two years at its tax-appraised value, $113,000, with no lookers," he said.

North Texas' low home appreciation rates make it difficult for many homeowners to get out of their house when they wind up in financial trouble. That adds to the foreclosure bubble, said George Roddy, president of Addison-based Foreclosure Listing Service.

"Especially if they are financing 110 percent of the property to begin with," Mr. Roddy said. "They finance all the closing costs and end up owing the mortgage company if they decide to sell."

Foreclosure Listing Service has found that about 44 percent of homes posted for foreclosure each month actually sell at auction. Through the first six months of 2006, lenders had taken back 8,452 D-FW area homes.

The average mortgage on the houses foreclosed on was $148,418.

And a look at the monthly foreclosure postings proves that hard times hit in all communities.

Everything from million-dollar mansions in exclusive Plano neighborhoods to $32,000 condos in East Dallas are in foreclosure, county records show.

http://www.quickdfw.com/
sharedcontent/dws/bus/
stories/
090106dnbusforeclosures.
333103f.html

Anonymous said...

Washington Post staff writer Michael Grunwald was online Monday, Aug. 28, at 2 p.m. ET to discuss his Sunday Outlook article, " The Housing Crisis Goes Suburban ."

Grunwald reports that the nation's affordable housing crisis is deepening, and not just for inner-city families on welfare. The problem has climbed the income ladder and moved to the suburbs, where service workers cram their families into overcrowded apartments, college graduates have to crash with their parents, and firefighters, police officers and teachers can't afford to live in the communities they serve.

http://www.washingtonpost.
com/wp-dyn/content/
discussion/2006/08/25/
DI2006082500975.html?nav=rss_business/
personalfinance

Anonymous said...

The US dollar lost steam against the euro in late trading on Friday on fresh concerns over the US housing market, after gaining earlier on a positive US job creation report.

Late on, the greenback was hurt by a report from the National Association of Realtors revealing that pending US home sales fell by 7.0 percent in July to their lowest level in three years.

Its pending home sales index, based on contracts signed in July, fell to a seasonally adjusted 105.6 in July from a downward revised 113.5 in June.

Paul Ashworth, senior US economist at Capital Economics, said outright falls in house prices would appear to be unavoidable if this trend continues.

"Housing is in freefall and that is the key to the economic outlook," he said. "There are now clear downside risks to our longstanding forecast that GDP [gross domestic product] growth will slow to 2.0 percent next year," he added.

The housing market has been a driver behind the US growth spurt over the last couple of years, and any suggestion that it is in trouble stokes up concerns about the economic outlook.

http://www.taipeitimes.com/
News/biz/archives/2006/09/
03/2003325999

Anonymous said...

I'd like to start a thread about a more positive topic, if we can find one: who will benefit from a housing freefall?

This has been discussed to some extent already, but some have pointed out that almost nobody benefits from a deep recession. Even those who patiently rented and have a nice chunk of change aren't going to be in good shape if they lose their jobs.

So... while I've heard about obvious losers (people who are invested in real estate, and those who derive income directly from the bubble like RE Agents and Mortgage Brokers), I haven't seen much discussion of collateral damage (or benefits)...

As I see it: the first collateral hit will be to folks who depended on the housing ATM - ie., the humvee dealership, swimming pool vendors, plasma tv salesmen, and so forth.

Mixed bag: people who are somewhat removed from this, but who can still get caught in a deeper downturn: private sector scientists and engineers, lawyers, accountants... some will keep their jobs and discover increased buying power, others will lose their jobs and become poor (even if they were not exposed to housing directly).

Winners: folks who have extremely stable professions/jobs - most physicians and surgeons, nurses, schoolteachers... ie., people whose jobs are almost completely insulated from booms and busts... asl long as these folks haven't bought into the bubble, they will almost certainly have the buying power to gain from a bust.

Now that I think about it, the further away you get from easy money, the better off you are.

Anyone want to chime in on this topic? I've only started thinking about it, but this could be the key to surviving (and even thriving) in the next decade or more...

Anonymous said...

The potential benefits from profiting from a housing bubble if it does happen are great.

But it requires taking on more risk.

In May, the Chicago Mercantile Exchange started trading futures and options contracts on home-price indexes for 10 individual metro areas including San Francisco, plus an index representing all 10 cities.

Futures and options are contracts that trade on exchanges and let investors bet on prices going up or down. They are known as derivatives because their price movements are derived from the price movements of an underlying security, asset or index.

Suppose you own an expensive house in San Francisco and are afraid it will plummet in value, but you don't want to sell it and move. You could stay in the house and sell futures or buy put options on the San Francisco housing price index. If home prices in San Francisco do fall, the value of your house will probably go down as well, but you will make money on your futures contracts. If you bet wrong, you will lose money on your contracts, but the value of your house will probably go up.

Unfortunately, futures and options have a steep learning curve, too steep for the average homeowner who wants to place a one-time bet. And the housing contracts are quite costly today because they are so thinly traded.

That could change. The costs will come down as trading volume builds. And the contracts could be used to create more consumer-friendly products.

"We'd like to see retail products that work off the futures market, but are easier to use," says Robert Shiller, the Yale University economist who helped develop the housing contracts and the indexes on which they are based.

http://www.sfgate.com/
cgi-bin/article.cgi?f=/
c/a/2006/09/03/
BUG45KT0J51.DTL&feed=
rss.business

Anonymous said...

Another potential benefits from profiting from a housing bubble if it does happen are great.

But it requires taking on a high degree of risk in shorting the banking sector.

A slowing economy has prompted investors to demand an additional 11 basis points of interest, or $1.1 million for each $1 billion face amount, on bank bonds since February, according to data compiled by Merrill Lynch & Co.

The widening yield premium amounts to a loss of $7.3 billion on bondholders' principal the past six months and a profit squeeze for banks, which make money on the difference between their borrowing and lending charges.

Bank bonds, which account for almost one fifth of the $5.2 trillion U.S. corporate bond market, are heading for their worst year since 1999 after the Federal Reserve increased interest rates 17 times, the government reported a 4.3 percent slump in new-home sales in July and oil prices rose 14 percent since January.

Slower growth may cause bond defaults to quadruple by 2008, adding to bank losses, Standard & Poor's says.

``Whenever you see some weakness in the economy, that has to get into investors' minds,'' said Alvaro de Molina, chief financial officer of Bank of America, in an Aug. 24 interview.

Some fund managers may be questioning whether the Fed has pushed the economy into a recession, de Molina said.

Investors are demanding 81 basis points more than the yield on similar-maturity Treasuries.

The spread was as high as 83 basis points on Aug. 11, which was the most since 2003.

The spread has widened twice as much as the 5 basis point increase in yield premiums, or spreads, for investment-grade bonds, according to Merrill. A basis point is 0.01 percentage point.

http://www.bloomberg.com/
apps/news?pid=20601103&sid=
aM6rUS3g4Ui0&refer=us

Anonymous said...

For the most part you are correct.

"Winners: folks who have extremely stable professions/jobs - most physicians and surgeons, nurses, schoolteachers... ie., people whose jobs are almost completely insulated from booms and busts... asl long as these folks haven't bought into the bubble, they will almost certainly have the buying power to gain from a bust."

Just keep in mind globalization was created by the greedy who look to profits above all.

Medical tourism agencies take operations overseas
Complex surgery is the latest service to move offshore - and clever businesses are helping cost-conscious patients go under the knife overseas.

MedRetreat, based in Odenton, Md., sent its first patient overseas two years ago. This year MedRetreat expects to ship 320 patients, mostly for cosmetic surgery, to partner hospitals in Brazil, Thailand, and Turkey. The average length of stay: 17 days.

Patrick Marsek, MedRetreat's managing director, says the company makes most of its money through commissions for booking hotel rooms and by pocketing the 20 percent discount on treatment costs that its partner hospitals grant in exchange for referrals.

Revenue is in the six-figure range, Marsek claims, adding that it will hit $1 million before long - especially now that he's looking to branch into more lucrative procedures like spinal fusions and hip resurfacings. "We're getting hundreds of inquiries a week," he says. "We've got our hands full." Marsek doesn't have any medical training.

Neither does Ken Erickson, who was running a fund-raising website in 2004 when a friend who owns call centers in India started talking about that country's first-rate private hospitals. Erickson, 44, hopped a plane to New Delhi, where he toured hospitals and met U.S.-trained doctors. His first thought: "My God, this is the perfect arbitrage situation. Buy below market and sell below market."

In May, Erickson founded GlobalChoice Healthcare, an Albuquerque, N.M., company with $1.5 million in angel funding and 14 employees. The startup has teamed up with medical providers in Costa Rica, India, Panama, and Singapore. It also has a deal with the five-star Taj Hotels Resorts and Palaces chain in India.

In June, GlobalChoice sent a patient to Punjab for a hip replacement that cost about $13,000, including airfare and a 20-day hotel stay. The estimated cost in the United States for the surgery alone? $40,000.

Erickson believes that the big money in medical tourism is in two markets: uninsured retirees ages 50 to 65 for whom Medicare hasn't yet kicked in, and self-insured companies that can no longer afford benefits for workers. He has met with Fortune 100 companies, though "they want to see the market mature first," he admits. If they do sign up, Erickson believes, he's sitting on a $500 million gold mine.

http://money.cnn.com/2006/
08/02/magazines/business2/
medicaltourism.biz2/
index.htm

Anonymous said...

Unfortunity teachers funding are tied to properties taxes.

Once housing prices goes down or foreclosure goes up, teachers jobs will be impacted.

Tax increases strain owners of El Paso homes, businesses

Property values soared this year because of El Paso's hot housing market, and although homeowners will not see that much of an increase in their property tax bills this year, many residents are unhappy with the tax increase.

The owner of a home in El Paso with a $100,000 taxable valuation last year that was bumped up by the maximum 10 percent allowed this year should see a property tax increase of 2 to 3 percent.

For business owners -- who don't have the protection of a 10 percent limit on valuation increases or the exemptions that go to homeowners -- it will be a different story.

The Central Appraisal District was more aggressive than ever in increasing valuations on business and investment property.

Using the $110,000 home value as a standard, the El Paso Times calculated the property taxes likely to be assessed on property in El Paso by five jurisdictions -- city, county, hospital district, community college and one of three school districts.

Most of a homeowner's property taxes are paid to a school district.

Homeowners in the El Paso Independent School District will see a 2.9 percent overall increase when the bill goes up $84 to $2,847 for the year.

El Paso Realtor Art Moreno Jr. works in El Paso and lives just across the state line.

"We live in Anthony, New Mexico. Can you imagine why?" he said.

Moreno said he wanted to get away from El Paso's property taxes. And though New Mexico has a state income tax, which Texas does not, Moreno is sure he pays much less in taxes when it's all added up.

"We live in a 3,600-square-foot home right on the golf course and pay $1,100 a year in property taxes," he said. "If we had this house on a golf course in El Paso, we'd be paying $5,000 to $8,000 a year."

Other El Pasoans are catching on.

"I'm getting more and more requests for housing and lots in New Mexico. People are just fed up," he said.

http://elpasotimes.com/
news/ci_4281503

Anonymous said...

The credit boom & bubble has exacerbated this < NL252 > 09/03 20:56:31

Now everyone thinks that they can buy their way out of every problem and success is measured by what they own or more importantly what can be displayed to others.

There should be no bailouts to people who get into trouble with credit (chapter 7 has already been restricted which is a great start), and none to people who didn't read the terms of their mortgage and somehow were able to borrow 5 times their annual income.

It was someone comment from the Craigslist.org housing forum that I found interesting.

Anonymous said...

"...success is measured by what they own or more importantly what can be displayed to others."

Well said. I am a devout Christian and I always give thanks to what I have, even how small it was. When this housing mania was happening, we were around, during parties, with boastful homeowners, who talks nothing but their "paper" wealth (equity). At times, my wife and I felt we were an outcast. We could not join the conversation, because of my opposite view. Nonetheless, I've tried to express my view regarding the bubble. They were not happy to hear it.

Now, I felt I was vindicated. By the way, we own a house too, which we bought in 1994 (pre-bubble)

Anonymous said...

It is just a matter of getting those boastful homeowners to stop selling their homes and everything would be just fine.

Or stop the boastful homeowners from stepping on each other toe rushing out the door of the house party as the Federal Reserve takes the punch bowl away.

NEW PORT RICHEY - The full-page advertisement in the Gulf Harbors Civic Association's newsletter was a desperate plea to homeowners.

"WHY IS EVERYONE SELLING?

MORE HOMES FOR SALE MEAN LOWER PRICES!

STOP SELLING!"

The appeal was not as surprising as the woman who submitted it: one of the affluent subdivision's most successful real estate brokers.

"The signs are going up faster than they're coming down," said JoAnn Milano of Century 21. "The market is suffering."

Her advice to Gulf Harbors homeowners: Unless you need to sell, don't.

http://www.tbo.com/pasco/
MGBT3IMBLRE.html?imw=Y

Anonymous said...

Sounds like this article was borrowed from HP webpage.

The big debate is whether housing will

a) stabilize at a lower level;

b) slide for an extended period; or

c) sink fast and take the economy down with it.

Each option carries its own flow chart of possibilities.

http://www.bloomberg.com/apps/
news?pid=20601039&refer=
columnist_baum&sid=axfgIEKXjgy4

Anonymous said...

Keith,

Here is another housing bubble
blog to add to your links

http://www.realestatedecline.com/

grim said...

Lowballing is alive and well in North Jersey!

Sussex, Somerset, Union Lowballs

Essex and Morris Lowballs

Bergen and Passaic Lowballs

Caveat Emptor!
Grim

Anonymous said...

It really is about the supply. Look at the US population in 2000 and the number of residences we had. Look at the population in 2005 and the number of residences we have. We have between 2.5 and 3 million more residences than we need. The builders make money they build. We have to "use up" those residences. This is really pretty simple

Anonymous said...

Barrons two weeks ago
1.) 32.6% new mortgages and home equity loans were interest only in 2005
2.) 15.2% of 2005 buyers no money down
3.) 10% of home owners now no equity in homes
4.0 $2.7 trillion in loans will adjust to the higher rates in 2006/2007

sounds like ingredients for a perfect storm

Anonymous said...

"Last anon: you're jerk!"

.." This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent."

=======================

Don't you just love the way someone always falls for this one? Too bad you can't have an irony detector surgically installed.

Anonymous said...

The only solution is to have the government CEASE the foreclosure process so homeowners don't lose their houses. The Democrats are finally waking up to this and will make it an issue in November.

We're all in this together, and nobody benefits when a family loses their home. The government can solve this problem, people. That's what I tell my students, I am a teacher, and they understand it. So why don't the adults understand it?

Roccman said...

Have boxcutter - an ain't afraid to use it.

Anonymous said...

We're all in this together, and nobody benefits when a family loses their home.

My cousin found his family's home affordably because the previous owner had to sell in a hurry to avoid foreclosure. I'm going to be looking to buy my first home in the next few years, and I would really benefit if the market was allowed to return to normal pricing levels, without federal intervention to save stupid speculators from themselves. If you bought a home you can't afford, I'll be happy to take it off your hands for the much reduced price it's actually worth, and you can get back out of debt by sharing your next apartment with a Pets.com investor.

Anonymous said...

--The only solution is to have the government CEASE the foreclosure process so homeowners don't lose their houses. --

Two people are bidding on a house. The price gets too high for either to afford it on a 30 year fixed within a reasonable payment to income ratio. Buyer #1 drops out, and figures he'll keep renting for a while. Buyer #2 uses an interest only ARM to stretch into another 50K of bidding potential, and wins the house.

A year later, the rate adjusts, and buyer #2 discovers he can't afford the house. Foreclosure looms.

Are you saying the government should tax buyer #1, who is still renting, and use the money to help buyer #2 keep the house?

Anonymous said...

Anonymous said . . .

'Anonymous said...
'"Last anon: you're jerk!"

"'"This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent."'

=======================

"Don't you just love the way someone always falls for this one? Too bad you can't have an irony detector surgically installed."

You beat me to the punch. The first writer was making fun, but the second took it seriously. I'm often astonished at literal, and humorless, some humans are. Even more astonished that it took a whole line of bloggers before you spotted the joke.

Roccman said...

Renowned Funds Manager Julian Robertson, Predicts Global Economic Collapse
Global Econ News Article

AL MARTIN of almartinraw. com has written an article about an interview
on CNBC with the renowned funds manager Julian Robertson.

Julian Robertson formerly ran Tiger Management, the world's largest
hedge fund.

Martin describes Julian Robertson as "One of the greatest of the
old-timers. 53 years on the Street. He manages the Robertson group of
funds. They used to call him, still do call him `Never Been Wrong'
Robertson. He has predicted every economic cycle, every debacle, every
bull market, and every bear market."

Martin says "Of course, he's a very old man now. But his reputation on
the Street is like nothing you could imagine. When the segment of his
interview was through, his comments alone took the Dow Jones down 50
points. Just on his comments alone. That's how powerful this man's
reputation is."

Robertson said that he's worried about the speculative bubble in
housing and the fact that more than 1/4 of all consumer spending is
now sustained by that bubble, plus the fact that 20 million citizens
could lose their homes in a collapse of the speculative bubble in
housing, and that the Fed and, indeed, central banks worldwide would
act in concert out of desperation to reinflate the global economy in
the process, creating an inflationary spiral unheralded in the
economic history of the planet.

"Where does it end?" Robertson was asked and he said, "Utter global
collapse." Not simply economic collapse; complete disintegration of
all infrastructure and of all public structures of governments. Utter,
utter collapse. That the end is collapse of simply epic proportion.

In 10 years time, he said, whoever is still alive on the planet will
be effectively starting again."

Bill Murphy of Letropolecafe. com says "As for Robertson's comments as
they relate to the gold price, we will most likely see the gold price
somewhere between $3,000 and $5,000 US an ounce. Wait until the facts
surface about how the central banks squandered 2/3 of all their bank
reserves to foster a price manipulation scheme. There will be a frenzy
to own the stuff like never seen before."

Julian Robertson blamed everything on what he calls 'the Bush-Cheney
regime'.

He says "they have now consolidated power and money on the planet to
the maximum extent possible. The planet´s net liquidity, that is its,
net free cash flow. Is now a negative number. The planet is not simply
sinking into a sea of red ink; it is already sunk. The people just
don´t realize it yet."

Robertson says "the Bush-Cheney regime is preparing the nation for
transition from democracy into dictatorship because a dictatorship
will be necessary to control, in 5 years´ time, food and water riots."

He said "the federal government, that part of Patriot II Act, the
internal exile, that the government is going to have to build now huge
detention compounds on federal lands, probably in the West where the
land is available, to potentially house 50 million or more citizens
that will be in financial ruin."

Julian Robertson went on to say "Food production will fall. Any
further effort to control environmental destruction will be abandoned.
Inflation will run into the double and eventually triple digits.
People will be carrying around U.S. dollars in wheelbarrows like Germany."

Robertson said there would be "total collapse of public
infrastructure. Total collapse of medical care systems. All public
pension plans, Social Security will collapse. All corporate pension
plans will collapse."

Robertson backed up his comments with statistics in one statement he
said "But, 14% of all real estate transactions now being interest-only
mortgages, and another 14% of people now, that, when they bought their
homes, originated more than 100% of the purchase price in the mortgage
and then borrowed further."

He said "The American consumer is effectively now supporting the rest
of the planet, consumption rates in all other nations are falling,
have fallen to the point that the tax revenues to governments, that
the business and industries those nation states are providing is now a
net negative number relative to total debt service and public cost,
that this exists in virtually every nation state on the planet now."

He said "More importantly, and I´m trying to think how we imply this
or how we express this to the people, what extraordinary times we are
living in and how the destruction of the planet has been engineered by
the Bushonian Cabal from 1980 to 1992, and then from 2001 to present,
which has effectively destroyed the economic liquidity of the planet."

When Ron Insana the interviewer said "you have sold all of your real
estate and you are moving into one of the new super-secure compounds
for wealthy Republicans for when the ´barbarians will be at the gate.´

Robertson replied, "Ron, those barbarians will be potentially a third
of the American population."

Robertson ended his comments by saying that "he hopes that he is not
alive to see this. The lucky ones are the ones who are my age now."

I would add to Julian Robertson comments, the lucky ones will be the
ones who buy gold and silver coins now, at less than $500 an ounce
before the price of gold sky rockets to $3000 then $5000 an ounce and
the price of silver goes over $100 an ounce in the years ahead as
Julian Robertson's predictions, made in his interview on CNBC, unfold.

Friday, June 03, 2005

Roccman said...

30 Worst Atrocities of the 20th Century

http://users. erols.com/ mwhite28/ atrox.htm

Roccman said...

try this one

http://tinyurl.com/dfn23

Anonymous said...

Home prices are dropping around the country. And if you want to sell yours
you most likely will have to find someone willing to take on debt above what they can afford and a bank still willing to lend to them. The housing market has become a titantic adventure.

Anonymous said...

Rather than face the recession, which should have followed stock market crash, the Fed chose to increase the money supply (which doubled in the last seven years) and lower the qualifications for getting mortgages. (I read recently that 90% of first time home buyers not only lie on their mortgage applications, but that 50% of them say that they earn twice as much as they really do. The applications are not cross-checked with IRS statements) Now, tens of thousands of Americans live in $400,000 and $500,000 homes without a penny of equity in them and with loans that are timed to increase dramatically in 2007 (many of the monthly payments will double).

So, how can we blame the Fed for the reckless and irresponsible behavior of the average homeowner?

Well, because they knew the effects of their “cheap money” policy every step of the way.

First of all, the Fed knew exactly where the money was going. Alan Greenspan endorsed the shabby new lending regime that put hundreds of billions of dollars in the hands of people who never should have qualified for mortgages. They were set up to fail just like the victims in the stock market scam who kept dumping their life savings in the NASDAQ when PE's were shooting through the stratosphere.

Secondly, the Fed knew that wages had actually regressed (2.3%) since Bush took office, so they knew that the soaring value of real estate was entirely predicated on debt not real wealth. In other words, home values increased because of the availability of cheap money, which inevitably creates a buying frenzy. It had nothing to do with real demand or growth in wages.

And thirdly, according to the Fed's own figures, “the total amount of residential housing wealth in the US just about doubled between 1999 and 2006, up from $10.4 trillion to $20.4 trillion.”

http://www.pej.org/html/
modules.php?op=
modload&name=News&file=
article&sid=5481

Anonymous said...

Last Anon 1114:56,

The sad part about this is that in the end, the innocent will also be dragged into this mess due to the economic mess it will create.

When our economy tanks, all of us will suffer one way or another.

I think it should not stop to just a mere blaming of who ever caused this. If it's the Fed, my question is, under who's administration? Somone has got to pay this come election in November.

Yes I agree with all the things you've said and our government should have anticipated this and should have some kind of an oversight to monitor the lending practices. We're all screwed not just the homeowners who bought at the bubble period.

Anonymous said...

richard,
no skulls in the usa, except biketoberfest. we are born at the right place in the right time. bubble or no bubble.

Anonymous said...

Twainadvisor & Robertson are both nuts. You two should meet for coffee. A gem from TA:

"Ask the Universe For What You Want & Believe You Will Receive It"

Maybe I should ask the universe for my hair back.

Anonymous said...

there is NO epic housing meltdown Keith


I live near San Francisco and don't see any price declines as of yet


2/1 condos still go for over 700k in the city


inventory declining over past several weeks



where is yout proof keith. justy random rambling and article posting with no real facts os of late


Look at housing stock prices. all forming bullish bttoms. TOL, BHS, DHI etc


maybe time to cover your shorts?

Anonymous said...

The housing market death spiral is just geting started.

Anonymous said...

"I live near San Francisco and don't see any price declines as of yet."

There's several factors that you haven't seen any apparent decline yet:
1.) You're aware, but in DENIAL.
2.) You may not be directly involved (i.e. selling your property)
3.) Option ARM has not reset yet.
4.) You're just simply being ignorant about the basic economics and the relationship of house price to personal income and interest rate.

Also, if don't own a property bought at the peak of the bubble with an option ARM, you wouldn't really feel the impact. Now, if you want any proof of stupidity, just look to the mirror.

Anonymous said...

San Francisco County

94102 $435,000 -26.9%
94109 $650,000 -1.5%
94111 $630,000 -25.4%
94112 3$697,750 -2.8%
94114 $1,032,500 -1.7%
94115 $837,500 -30.9%
94117 $775,000 -5.5%
94118 $1,100,000 -17.8%
94124 $580,000 -8.7%
94131 $850,000 -6.6%
94133 $804,000 -12.3%

94103 $625,000 1.5%
94105 $672,500 76.2%
94107 $622,500 0.7%
94108 $1,018,333 23.4%
94110 $800,500 0.7%
94116 $839,500 5.6%
94116 $839,500 5.6%
94121 $850,000 3.7%
94122 $850,000 0.0%
94123 $1,500,000 22.4%
94132 $818,000 6.8%
94127 $1,035,000 13.1%
94134 $700,000 8.5%

http://www.dqnews.com/ZIPSFC.shtm

Anonymous said...

The Consequence of Real Estate Bubbles

The first article covers the post-1929 secular contraction in real estate and credit. Published with permission here, it's from the April 24, 1992 edition of Grant's Interest Rate Advisor. An interesting line was "last glacial, deflationary bear market in New York City real estate" (begins with "The Slowest Asset").

The next article reviews today's precarious condition of Florida real estate. Mike Morgan (mike@morganflorida.com) is the author and it is titled "Ghost Housing Market".

This is followed by Frederick Lewis Allen's riveting description of the 1920s land bubble in Florida. This is extracted from Only Yesterday. Published in 1931, it is a classic account of the "Roaring Twenties" bubble.

This is followed by a Wrap, which briefly reviews the bubble collapse of 1343 to 1346, as well as other examples.

http://www.safehaven.com/
article-5813.htm

Anonymous said...

Investors Optimism declines further

UBS/Gallup Index of Investor Optimism Reaches New Low for the Year at 53

Seven in Ten Investors Say Real Estate Conditions are Getting Worse

New York, August 28, 2006 – Investor Optimism fell in August to a new low for the year, dropping two points to 53. Since January, the Index has been on a steadily declining trend, dropping 40 points. The UBS/Gallup Index of Investor Optimism is conducted monthly and had a baseline score of 124 when it was established in October 1996.

One key issue of growing concern to investors is the residential real estate market. Fifty-six percent of respondents rate conditions in the real estate market as “only fair” (44 percent) or “poor” (12 percent), a significant jump from the 46 percent who held these views in June and July. Additionally, 70 percent of investors believe that conditions in the real estate market are getting worse, up from 63 percent in June. Investor sentiment toward investing in real estate assets nationwide has also fallen. In August, 50 percent of investors said that now is a good time to invest in real estate related assets nationwide, down from 55 percent in June.

http://www.ubs.com/1/e/about/
research/
indexofinvestoroptimism.html

Anonymous said...

Today is a national holiday, but most Florida families hardly feel like celebrating Labor Day. They're working too hard to pay rising bills for electricity, homeowners insurance and gasoline. The value of their homes have risen substantially, but they couldn't afford to move and pay higher property taxes.

The mood is just as gloomy in many Florida households. The University of Florida reports that confidence in the economy is at its lowest level in 13 years. Rising mortgage interest rates, soaring homeowners insurance premiums and an unfair property tax system are all contributing to a slumping housing market.

Yes, the state leads the nation in the number of new jobs, and the unemployment rate is just 3.3 percent.


http://www.sptimes.com/2006/09/04/
Opinion/Too_many_work_hard_bu.shtml

Anonymous said...

Early Subprime Mortgage Defaults Rising

Nationwide, about three and a half subprime loans out of every 10,000 originated between January and June had a delinquency on their first monthly payment, according to LoanPerformance, a subsidiary of First American Real Estate Solutions.

By comparison, only one out of every 10,000 subprime loans granted last year had experienced missed payment in their first month.

LoanPerformance's data also show that so far this year, there has been a 14 percent increase in the number of nonprime mortgages with at least one missed payment in the first three months after origination.

"If those borrowers are finding themselves in trouble very early on, it may give lenders an indication that the underwriting criteria or quality control are not sufficiently tight," says Damien Weldon, director of collateral risk analytics at LoanPerformance.

Based on the year-to-date data, Weldon says early payment defaults on subprime mortgages are expected to increase this year.

Those early defaults have forced lenders such as

NetBank Inc.,
Fremont General Corp. and
H&R Block Inc.

to buy back loans already sold to whole-loan acquirers, particularly Wall Street investment banks that pool and package those loans into asset-backed securities and then sell them to large investors like insurance companies and hedge funds.

The buybacks, in turn, have led lenders to incur losses and set aside more money in their reserve funds for potential loan repurchases in the future.


http://news.moneycentral.msn.com/
provider/providerarticle.asp?Feed=
AP&Date=20060829&ID=5980508

Anonymous said...

Metro Atlanta Foreclosures rise sharply in 2006 driven by defaults in Adjustable Rate Mortgages. Equity Depot reported today that the number of Metro Atlanta foreclosures has increased 20% over last year but a staggering 130% increase since 2001.

Atlanta, GA (PRWEB) September 1, 2006 -- Equity Depot reported today that the number of Metro Atlanta foreclosures has increased 20% over last year but a staggering 130% increase since 2001. According to historical data, the 13 metro counties had a total of 25,276 foreclosures year to date compared to 21,030 for the same time period in 2005. In 2001, that number was 10,956.

"The number of foreclosures in the Metro area continues to track steeply upward driven largely by the increased percentage of Adjustable Rate Mortgage defaults. For example, in June 2005, 21% of Dekalb’s foreclosures were ARMs. That number in 2006 was 38%," said Mark Sulimirski, Chief Product Engineer, Equity Depot.

Indications from Equity Depot customers suggest that this trend will accelerate over the next few years as interests rates rise.

http://www.prweb.com/releases/
2006/9/prweb431945.htm

Kevin said...

I used to work inside one of the big ARM paper mills. Man, it was ugly. Here's what it was like:

cryptogon.com

Anonymous said...

The only solution is to have the government CEASE the foreclosure process so homeowners don't lose their houses. The Democrats are finally waking up to this and will make it an issue in November.

We're all in this together, and nobody benefits when a family loses their home. The government can solve this problem, people. That's what I tell my students, I am a teacher, and they understand it. So why don't the adults understand it?

What mental disorder have you been diagnosed with? What we need is LESS GOV. NOT MORE GOV. DUH

Roccman said...

Oh no Keith - the dreaded sanctions....NOT!

Hey but nice to see you have gone back to what you do best...predict the predictable.

Analysts fear imposing UN sanctions on Iran would
disrupt oil supplies from
the world’s fourth-largest crude producer which pumps about 4.0 million barrels of oil per day, most of it exported.

“If crisis does come to the fore ... we will
overcome it economically,” said
Forbes, editor-in-chief of Forbes magazine which
publishes an annual list of
the world’s richest people.

Iran has ignored an August 31 deadlined set by
the UN Security Council to
halt uranium enrichment work or face possible
sanctions.

This left world powers gearing up for a fresh
round of diplomacy on how to
deal with Iran’s defiance, with the United States
pressing the council to
impose targeted sanctions.

Uranium enrichment is a process that can be used
to make nuclear fuel and,
in highly extended form, the core of an atomic
bomb. Forbes said the United
States and its allies are likely come to a
decision soon as to what to do.
“Make no mistake, that decision is coming in the
next year or so. Why?
Because Iran has been dispersing its nuclear
assets around the country,
burying them deepeer and deeper underground so
airstrikes are going to
become more problematical,” he said.

“So if the decision is made to either disrupt or
destroy Iran’s nuclear
programme, that decision is going to have to be
made in the next few months
because the longer we wait, the more difficult
air strikes will be.

“So just be prepared for short term turbulence.”

Meanwhile, Forbes said that China will likely
face stronger pressure to
revalue its currency if the Democrats make major
gains in US congressional
polls in November, as predicted


http://www.thepeninsulaqatar.com/Display_news.asp?section=Business_News&subsection=market+news&month=September2006&file=Business_News200609054216.xml

Roccman said...

Lie by Lie: Chronicle of a War Foretold: August 1990 to March 2003

The first drafts of history are fragmentary. Important revelations arrive late, and out of order. In this timeline, we’ve assembled the history of the Iraq War to create a resource we hope will help resolve open questions of the Bush era. What did our leaders know and when did they know it? And, perhaps just as important, what red flags did we miss, and how could we have missed them? This is the first installment in our Iraq War timeline project.



http://www.motherjones.com/bush_war_timeline/

Andrew Hodge said...

Am I ever glad I am not in the States right now. There are just too many economic factors working against the economy.

In Canada there are a few markets that, if left unchecked, will pop like Vancouver and Calgary. In the Toronto area things have slowed slightly. There are more homes listed with similar numbers of sales to the last few years, i.e. high volumes. There are a few pockets that could use a 5% decrease as the sellers are still trying to get a 5-10% increase each year and the market can only hold a 2-4% IMO. If Sellers do not adjust their thinking about prices then it is probable to expect bigger cuts in prices. I doubt this will be on the same scale as South of the boarder, since we still have a very large volume of buyers that can afford homes and are actively buying. Last I checked, in the Greater Toronto Area real estate markets we were still on course for another record year for sales volumes.

I just hope that sellers start recognizing that the markets have changed so that we do not end up in a bubble situation.

Yes, I am a Realtor® and I only get paid if people buy, but homes only sell if they are priced to what the market will pay. Being realistic about your homes value in today's market is the difference between a successful sale and bottom dropping off.

Anonymous said...

Home Prices Show Sharp Slowdown in 2Q
Tuesday September 5, 11:13 am ET
Home Prices Across the Country Show Sharp Slowdown in 2nd Quarter, Report Shows


WASHINGTON (AP) -- U.S. home prices continued to rise in the second quarter but showed the biggest slowdown in three decades, federal regulators reported Tuesday.
The figures released by the Office of Federal Housing Enterprise Oversight, the agency that oversees the big mortgage-finance companies Fannie Mae and Freddie Mac, provided the latest indication that the housing market is cooling substantially.

Average home prices rose 1.17 percent in the April-June period, compared with 3.65 percent in the second quarter of 2005 -- the biggest decline in price growth since OFHEO started keeping track of home prices in 1975, the new report showed.

The agency cited higher interest rates and rising inventories of homes for sale as possible factors in the slowdown in price growth.

Anonymous said...

Remarks by Governor Ben S. Bernanke
Before the New York Chapter of the National Association for Business Economics, New York, New York

October 15, 2002

Asset-Price "Bubbles" and Monetary Policy

mY gOD kEITH,
LOOK AT tHIS HISTORICAL rEAL eSTATe bUbbLE "pOSITION" FROM a 2002 cHOPPER bEN pERSPECTIVE.....
wAHT A sCHOCKER.

BUBBLESITTER


http://tinyurl.com/mg9zq

Anonymous said...

"The only solution is to have the government CEASE the foreclosure process so homeowners don't lose their houses. The Democrats are finally waking up to this and will make it an issue in November.

We're all in this together, and nobody benefits when a family loses their home. The government can solve this problem, people. That's what I tell my students, I am a teacher, and they understand it. So why don't the adults understand it?"

This is what's called thinking with your heart. It's great you'd like to help out your neighbors, but think logically about the ramifications of this. This is precisely what got us into this predicament: government bails us out of our mistakes which has eliminated negative consequences for our actions. All while those who take responsibility for themselves pick up the tab. This has created a nation of idiots who can't or won't fend for themselves and demand continual govt bailouts.

Thinking with your heart works in small groups (eg. family or small community) where peer pressure and social forces keep the free-loaders in line. But in the anonymity of millions of people it doesn't work. They won't hold up their end of the bargain and will continually ask for more.

That's the challenge of the 21st century IMO. To design societal structures that implement the social contracts on a larger scale. ie. some level of altruism combined with accountability.

Anonymous said...

this is like the clowns who said after the nasdaq crashed in the first wave in the summer of '00 that it was the "pause that refreshed" and necessary to shake out the "nervous nellies" so that the nasdump could soar to 10k. tarring, feathering, setting ablaze, and dumping off the golden gate bridge are each appropriate for these con men.

Anonymous said...

insanity reigns in portland, or. downtown condos are listed for sale for $350-$500+/sq. ft. all the while, bubble benches are popping up all over the city.

in three upscale nw portland area in the west hills, residence are BANNING OUTRIGHT realtors' signs being placed on streets, sidewalks, etc.

there is actually a 2BR/2BA 2300 ft. condo at market/vista in downtown portland listed for $1.199M, and the hoa fee and property taxes are ONLY $929/month and $1588/month!!! who are these lunatics who think there are equally or more insane people who would pay such prices and be saddled with such monthly costs?!

i'm not talking park ave here, folks; this place is a run-of-the-mill condo but with a view of the polluted willamette river and the p-town skyline.

we're now seeing japanese-like prices occurring in london, nyc, and now portland, or, of all bloody places!!!

you could not rationalize such prices if you had a lifetime to do it. these people are dangerously f@&king insane, and that's all there is to it, not to mention the delusionally sick bastards who issue mortgages for these properties.

this kind of social pathology is toxic and in need of a "cure", and the sooner the better.

Roccman said...

ok autofx -

why then does your logic not apply (or does it) to Archer DM and the production of ethanol - were it not for the gov heavily subidizing ethanol plants - the industry would tank...

or how bout development of IGCC (look it up) plants...

Oh that's right - big corporate brother is first in line for the hand out and us measly tax payers (supporting big corporate brother) are last for the handouts.

Face it bro... the gov set this housing market fall up years ago...sold joe public a bad bill of goods and now must bail out the banks just like:

Chrysler and savings and loan fallout in the 80's

or we measly taxpayers WALK - last I heard no debtor prisons around...and the credit rating...what a joke - we are globally bankrupt

seems like the exceptions only apply to big corporate brother - huh autofx??

Anonymous said...

mr. hodge, i see you have been a realtor for 3 whole years. impressive! is that about as long as you held positions as "engineer", pastry chef, and production worker (for the building industry, no less)? we all know what happens to your career as a "realtor" when the housing bubble bursts, don't we?

you have an advantage, however, as you can ditch the suit and tie and jump "in the ditch" with a shovel for a living, one suspects. that is, assuming there are any ditch-digging jobs left after the bubble bursts. habla espanol?

then again, you can go back to baking pastries. well, perhaps not if millions of restaurant jobs are lost when the housing bubble bursts, equity values collapse, and people cease eating out or reduce their dining out significantly.

time for a new career, mr. hodge.

Anonymous said...

There doesn't seem to be any housing crash happening at all -- I don't know what you loonies are talking about.

Things are slowing down after a long run-up is all.

Housing panic is so stupid. There are millions of new Americans every year. There's not going to be any bubble burst.

Andrew Hodge said...

Thanks for the comments, but I plan to stay in real estate. I am actually looking forward to any slowing down of the markets as it will probably send many other agents running as you have suggested that I might do. If I am a victim of attrition so be it, but currently business is building and just because the market slows or even crashes, if is should, does not mean that homes do not sell or that Realtors like myself will not be needed to help those that want or need to move.

The biggest difference in a slow market is the size of the commission and how many clients you need to have in order to keep a regular income.

I know you would rather hear that all Realtors will be heading for a big bridge to jump off, but neither your motivational word nor a slowing market, or in your case a crashing market, will keep me form providing the best service I can and building my business.

Have a great day:-)

Anonymous said...

Actually my aunt sold real estate and then it totally dried up in like the early 90s in California, and she couldn't make any money.

She wound up dating (mooching off of ) some junk yard owner and then moved to Montana where I heard she lives off of welfare and smokes pot.

Anonymous said...

beers are £5 here (that's about $9US)

can get a pint for under £2 just up the street from me in glasgow.

Anonymous said...

Andrew Hodge

The Canadian housing market is different then the one in the states.

But they have one similarity, which was well said in your statements.

"homes only sell if they are priced to what the market will pay. Being realistic about your homes value in today's market is the difference between a successful sale and bottom dropping off."

"The biggest difference in a slow market is the size of the commission and how many clients you need to have in order to keep a regular income."

Good Luck with building your future business.

Oh, by the way - the states will probably see a 30% when it is all said and done.

Anonymous said...

From above....Pot smokin auntie!

Go Baby Go!

Anonymous said...

WOW! Ran into local realtor today San Diego(tues 5) at lunch. I asked him how things were going, his response was surprising. He said, 'Things are Very Slow!', I can't believe I actually had a realtor tell me that face to face!
I will admit, this guy has always been a good guy, his honesty was refreshing!

Anonymous said...

Sharp home price pullback
Government index shows the largest quarter-to-quarter fall off in home price increases in three decades.

NEW YORK (CNNMoney.com) -- New evidence of a housing market slowdown emerged Tuesday - growth in the price of a single family home was just 1.17 percent in the second quarter, a decline of more than one percentage point from the prior quarter when prices grew 2.20 percent.

The Office of Federal Housing Enterprise Oversight (OFHEO), which released the report, said it was the slowest quarterly increase since the fourth quarter of 1999 and was the sharpest quarter-to-quarter pullback since OFHEO began the index in 1975.

http://money.cnn.com/2006/09/05/
real_estate/Ofheo_home_prices/
index.htm?section=money_latest

Anonymous said...

Cash Back at Closing? Strictly Illegal! Real Estate Expert Ralph R. Roberts Explains Why

Roberts cites the

Uniform Residential Loan Application
(known as Form 1003)
that every home buyer signs when applying for a home loan.

"The 1003, which is authorized by Title 18 of the United States Code, Section 1001, is one of those documents that has small print that lawyers always tell you to read before signing on the dotted line,"

Roberts says.

"It says it is illegal to provide false information on a loan application or any other document related to a real estate transaction. So if a buyer, appraiser, real estate agent, loan officer, or another party provides a false statement of a property's value on a 1003 or any other document, they're breaking the law. If you go along with the scheme, you become an accomplice, subject to prosecution."

On first glance, cash back at closing looks like a win-win situation. The buyer pays a little more for a property than it's worth, and the seller agrees to return the surplus cash to the buyer, who can then use it to pay off outstanding debt or renovate the property. The seller gets close to or better than the asking price, the real estate agent gets a bigger commission, the loan officer chalks up another successful loan, and the lender scores a larger loan and stands to earn more interest over the life of the loan.

Unfortunately, cash back at closing schemes are illegal and potentially damaging to the lender, who is fooled into making a risky loan. "And lenders aren't the only losers," warns real estate and mortgage fraud expert Ralph R. Roberts. "Buyers can be tricked into buying more house than they can afford. Housing values in the area are artificially inflated, making housing less affordable and raising property taxes. Honest real estate agents lose business to dishonest agents who offer cash back deals. And neighborhoods begin to buckle when homeowners default on the inflated loans and their properties end up in foreclosure. That's why cash back at closing is illegal."

http://biz.yahoo.com/prnews/
060905/detu016.html?.v=60

Anonymous said...

Thanks for the comments, but I plan to stay in real estate. I am actually looking forward to any slowing down of the markets as it will probably send many other agents running as you have suggested that I might do. If I am a victim of attrition so be it, but currently business is building and just because the market slows or even crashes, if is should, does not mean that homes do not sell or that Realtors like myself will not be needed to help those that want or need to move.

The biggest difference in a slow market is the size of the commission and how many clients you need to have in order to keep a regular income.

I know you would rather hear that all Realtors will be heading for a big bridge to jump off, but neither your motivational word nor a slowing market, or in your case a crashing market, will keep me form providing the best service I can and building my business.

Have a great day:-)

Wednesday, September 06, 2006 1:26:52 AM


bloody hell, where's my barf bucket. with 3 long years in the business, and during the biggest bubble in US history, no less, what the hell do you know about succeeding in a real estate bust?
what were you doing during the busts of the early '80s and early to mid-'90s? were you out of diapers? still popping zits? were you still in college and brining your dirty laundry home once a month? still at home raiding your parents' refrigerator and borrowing the car to hang out at the mall? give me a f@&king break, pal. do you know how many clowns like you will be ground up like chopped liver and never admit to being in the unreal estate business? legions of walking dead real estate "volunteers".

i've seen two cycles of this nonsense over the past 25-26 years. the newbie know-nothings and brash, ambitious real estate geniuses appear and are all the same. so confident. so versed in parroting the same bloody drivel time and again. not an original idea in their crania. so delusional in their self-serving ideas that they are worthy of an obscene 6% of sales price of property.

we have a long way to go, folks, before the air is completely out of this bubble. with the likes of mr. hodge politely telling me to shove it, he and his ilk have a lo-o-o-o-o-ong way down to fall.

and, no, i don't plan on having a nice day b/c a naive newbie realtor wishes me to. i'll have a great several years, however, watching you parasites run out of blood to suck from unsuspecting victims, as well as seeing the likes of fradulent appraisers, wide-assed title agents, mindless mortgage brokers/processors--your sleazy fellow parasites and symbiotic kin--squirming and writhing under my boot.

and, yes, i like the feeling of pests crunching and squishing under my shoe. i expect to enjoy stepping on lots of pests in the years ahead.

see, isn't it nice to know just what the public thinks of you? just thought i'd make your day.

Remember, remember the fifth of November
Gunpowder, treason and plot.
I see no reason why gunpowder treason
Should ever be forgot...

Anonymous said...

So where is this crash? In my neighborhood (south scottsdale), sales increased 50% over last month (but down 5% from last year).

Prices are up 2-3% recently (up 20% from August last year)

I'm waiting....

Anonymous said...

I over heard a conversation between two people about a year ago when I was at a resturant, one guys said that his
friend own several mortgage brokers firm in the San Jose area.

Anyways it was to the effect:
"to get ahead in this business you got to fudge the numbers a little."

He goes on to say that his friend does it because everyone else is doing it, and the Fed is not going to be able to catch that many people.

Then he goes on to said that he wish he could be like his friend who is also a high roller in Las Vegas.

So how many mortgage broker in the bay area are during this and were they a sleep when they took the real estate ethnic class.

The Criminality of Mortgage Fraud

Federal Crimes Include:

Section 1001: Statements or Entries

Section 1344: Bank Fraud

Section 1014: Loan and Credit Applications

Section 1010: Dept of HUD and FHA Transactions

Section 1341: Frauds and Swindles

Section 1343: Frauds by Wire, Radio or Television

Sections 1961 etc: RICO

CA Penal Code Sections 532(a) and 532(f)

FL Penal Code Sections 817.54 and 817.03

Anonymous said...

Phoenix builders work to mend fences with agents

PHOENIX -- Builders are spending big bucks and dishing out heaping helpings of hospitality during what has become the summer of love in the Phoenix new-home market.

The objects of their affection? The real estate agents they spurned during last year's housing boom.

The wooing has agents sipping wine and tossing down hors d'oeuvres in Buckeye, networking to live music in Chandler, munching free sandwiches in Florence and cashing fat commission checks.

It was a different world in Phoenix housing last year at the peak of the boom. With buyers camping out at subdivisions, builders didn't need agents to bring them prospects.

Builders, looking to maximize their profits, cut agents' commissions or started paying flat fees, if they paid any fees at all.

That angered a lot of agents, who felt that builders were abusing the long-standing relationship in this city between the people who sell homes and those who build them.

But the tables have turned. Demand has evaporated, and builders are trying to get cozy with agents again, throwing parties and offering big fees -- commissions of 4 to 5 percent -- for selling houses fast. The typical commission is 3 percent.

"I've been in the business over 23 years, and I haven't seen these kinds of commission incentives," said Margie O'Campo de Castillo of Arizona Dream Realty in Phoenix. "There's a lot of crazy stuff out there right now."

Maybe not crazy enough. Agents say builders don't realize the depth of the lingering animosity. At a time when new-home sales are down 22 percent in the Phoenix area and Wall Street is pushing for better performance, builders need all the shoppers they can get.

http://www.chicagotribune.com/
classified/realestate/newhomes/
chi-0609020095sep02,0,4161025.story?
coll=chi-classifiednewhomes-hed

Anonymous said...

"TwainAdvisor said...
Hey Moron Keith,
..."

Keith,

Don't listen to this jerk. You have a great blog. I saw numerous articles out today about the sharp pullback in appreciation and price declines in numerous metro areas.

Penny

Anonymous said...

If house values drop 25%, watch out! Don't worry about a ressession,> It will be a full blown depression! Hold on to your hat Dorothy the house is falling!

Anonymous said...

I also met a real estate agent in San Diego. Then I walked to the other side of the bar and met 2 mortgage brokers. Then I went outside for a smoke and met 3 more real estate agents. Then I took a cab back to the hotel and met a real estate investor. LOL

I love San Diego, its about to turn back into the transient, low cost, no jobs, party beach town that it was ment to me.

Anonymous said...

Sales and Prices Turn Downward

After an upbeat June, home prices fell in July. The median price for re-sale single-family homes in Scottsdale dropped 13.5% to $603,000 from the month before. Year-over-year, the median price was off 0.3%. This is the first time since February 2002 that the year-over-year median price has been negative.

The median price in Phoenix fell 2% to $245,000 with the annual appreciation up 6.5%.

Home sales tumbled in July. Scottsdale sales were down 24.1% from June and off 32.7% compared to last year. Phoenix sales were off 13.1% month-over-month, and down 31.1% compared to July 2005. (For complete sales tables, click here.)

Days on market for Scottsdale single-family homes dropped eight days to 88 in July.

http://southwestrealestate.com/
news.htm

Anonymous said...

House Foreclosures Rate Up

KENNEWICK -

Mortgage rates keep rising and somepeople just aren't making their house payments.

In Washington state the foreclosure rate is up nearly a third over last year. It's up about two-thirds nationwide.

Local loan officers say the Tri-Cities is being spared the bad news at least so far. They credit the lower price of housing versus the westside of the state.

"People had extra equity use," said Tom Coyne, a loan officer. "Maybe they've used up those funds and now they're unable to afford the home they're living in. In the Tri-Cities we haven't necessarily seen that increase, and useable equity. So there hasn't been as many foreclosures as there have in other parts of the country."

Loan officers encourage home buyers to stay away from adjustable rate mortgages and interest only loans.

http://www2.keprtv.com/
x3442.xml?ParentPageID=
x3344&ContentID=x58895&Layout=
KEPR.xsl&AdGroupID=x3442

Anonymous said...

Executive Q&A: Mortgage lender Steinhofer tells ins and outs of various loan deals

Q: A slower real estate market means fewer homes are being sold and banks are writing fewer mortgages. How do banks cope financially with these kinds of market shifts?

A: What I will tell you would be based on the industry as a whole and not particularly my bank. Obviously, when you have a downturn in volume, you have some reductions in staff. You watch your costs, your bottom line.

Where we've dropped off in the industry is more in the refinancing market. Every year there's a certain amount of refinancing, some years higher, some years lower. This year, it dropped off maybe a little more than we had anticipated.

The other thing the industry is doing is adding new products. One thing most of the banks are looking at are reverse mortgage products for the homeowners 62 and older. That really expands our market to help offset some of the losses due to the reduction of refinancing.

Overall, you watch your bottom line. You watch your costs. If somebody quits or retires, you don't fill that spot. In California and other states, some of the nationals - Countrywide and Washington Mutual - have announced a fair amount of layoffs, closing of processing centers and consolidation of regional centers.

Q: Interest-only and no-down-payment loans grew in popularity during the real estate boom. Will these continue now that the market has slowed and do you think their presence will boost foreclosures as interest rates rise?

A: In California, for example, one program that's been popular is the Option ARM, which is a very dangerous loan program for a borrower who's not very sophisticated.

On the interest-only and the 100 percent loans, as long as the value of real estate continues to go up, they should be fairly safe.

The Option ARM - they call it the neutron mortgage because it saves the house, but kills the borrower. You can keep your payment at a level that may not be enough to pay the interest that's owed. The interest rate can go up or down on a monthly basis. If you choose to make a payment not high enough to cover all the interest, that gets added to your loan balance. So, if property values are going to stay stable, your balance could go up. You could start out with 90 percent or 95 percent loan-to-value and actually owing more than what your house is worth.

In California, they did a lot of that, and it was designed to increase affordability as property values kept skyrocketing in those markets.

Parts on Wisconsin were removed.
Read the whole story.

http://www.madison.com/wsj/home/
biz/index.php?ntid=96369&ntpid=4

Anonymous said...

Subprime-Mortgage Market Turning Subpar

UBS Investment Research

WE ARE DOWNGRADING subprime-mortgage real-estate investment trusts on early signs of worsening credit.

In light of the recent negative news from several nonprime-mortgage originators

H&R Block,

Fremont General,

Accredited Home Lenders,

Impac Mortgage,

First Horizon National and

Fieldstone Investment

about the outlook for their mortgage business, we have become increasingly more concerned that credit quality is likely to worsen sooner rather than later in the nonprime-mortgage space.

We believe that a combination of rising rates, an inverted yield curve, slowing economy and worsening credit represents a perfect storm for the

http://online.barrons.com/
google_login.html?url=
http%3A%2F%2Fonline.barrons.com%
2Farticle%2FSB115706420104151072.
html%3Fmod%3Dgooglenews_barrons

or

http://messages.finance.yahoo.com/
Financial/
Consumer_Financial_Services/
threadview?m=tm&bn=3223&tid=
27555&mid=27555&tof=19&frt=2

Anonymous said...

Glasgow is where the UK Hicks live.
uggg

Roccman said...

There's no crash Keith - check this out my friend...

Larry “Lucky Larry” Silverstein

You’ve got to be lucky to make $4 Billion killing on a 6-month investment of $124 Million

Larry Silverstein is the New York property tycoon who purchased the entire WTC complex just 6 months prior to the 9/11 attacks. That was the first time in its 33-year history the complex had EVER changed ownership.

Mr. Silverstein’s first order of business as the new owner was to change the company responsible for the security of the complex. The new security company he hired was Securacom (now Stratasec). George W. Bush's brother, Marvin Bush, was on its board of directors, and Marvin’s cousin, Wirt Walker III, was its CEO. According to public records, not only did Securacom provide electronic security for the World Trade Center, it also covered Dulles International Airport and United Airlines — two key players in the 9/11 attacks.

The company was backed by an investment firm, the Kuwait-American Corp., also linked for many years to the Bush family. KuwAm has been linked to the Bush family financially since the Gulf War. One of its principals and a member of the Kuwaiti royal family, Mishal Yousef Saud al Sabah, served on the board of Stratesec.

Now, consider: The members of a small cabal owned the WTC complex, controlled its electronic security, and also controlled the security not only for one of the airlines whose aircraft were hijacked on 9/11, but the airport from which they originated.

Another little “coincidence” -- Mr. Silversten, who made a down-payment of $124 million on this $3.2 billion complex, promptly insured it for $7 Billion. Not only that, he covered the complex against “terrorist attacks”.

Anonymous said...

Now, the BIG question, did or will the insurance company pay?

Anonymous said...

Check out George Carlin’s take on consumerism and who really controls America.
Click Here

Anonymous said...

:Not only that, he covered the complex against “terrorist attacks”.

Remember '93, there was a terrorist strike in the parking garage over there. Yeah, it was a joke of an attack but still, it warrants buying some terrorism insurance.

Usually, good speculators have a nose for this sort of thing.

Anonymous said...

"Larry Silverstein" - is it a Jewish name?

Anonymous said...

:"Larry Silverstein" - is it a Jewish name?

I don't get it, why is it that only Jews get to name themselves after precious metals?

What if an Armenian wants to be named Goldmanian? Or a Greek guy, Silveropolous? How about a slavic guy, Goldavich?

Or a Dutchman, Goldmember?

Anonymous said...

system meltdown in boston:

“The last time auctions were popular around Boston, the real estate market was in crisis. ‘I was around in the late ’80s and early ’90s when all that went on, and I kind of cringe. Are we doing this all over again?’ said Diane Maloney, who markets the 44-unit loft building on Broad Street.”

“The auction is a big risk for the developer. It would be financially ruinous to sell the rest of the Folio units at their minimum price, which range from 31 percent to 44 percent off the most recent asking prices. In some cases, the developer had already reduced asking prices.”

“A one-bedroom currently offered for sale at $480,000 will be sold at or above its $325,000 minimum price. ‘I wish I could’ve bought my unit for less money,’ said Christine White purchased a one-bedroom on Folio’s second floor in the ‘low $400,000s’ earlier this year.”

http://www.boston.com/business/globe/articles/2006/09/06/going_once/?page=full

Greg White said...

Keith said beers are $9???

I noticed you don't have any social bookmarklets on your blog. You might want to add some to give others a chance to bookmark your blog with some of the social bookmarking services.

There are free plug-ins available for blogger. Additionally I wrote a package to do the same. You can find it here if you're interested. http://www.tagplusbookmarks.com

Perhaps though with all of the comments here, you don't need to add bookmarklets.

Ahhh! What the hey! It's Google's server isn't it???

Best of Luck to you,

Greg White

Anonymous said...

The National Association of Realtors reports that in July existing home sales decreased 11% compared with the prior year and existing home prices increased less than 1% during the same time frame.

And anyone who isn't well diversified is likely to get hurt.

"Many of the drivers that had supported the housing market during the last five years have retreated," says Celia Chen, director of housing economics for Moody's Economy.com.

"Now we are in the midst of a downturn and will be seeing more softening for at least the next year."

Assess Your Portfolio

Not sure if you're too heavily invested in real estate? Use this as a guideline. Saving for that first down payment is notoriously difficult.

So it's understandable that for most first-time home buyers a house will make up a large percent of one's total net worth.

But as folks age and grow closer to retirement, they should have liquid assets that generate enough income so they don't need to downsize into a smaller condo to fund their golden years, says Patricia Powell, a certified financial planner based in Martinsville, N.J.

How do we quantify this? A 55-year-old's home should equal no more than 30% of his total net worth, says Powell. So if one's four-bedroom colonial is worth $500,000, the rest of his investment portfolio (made up of stocks, bonds and other liquid investments) should equal $1.1 million to $1.2 million.

At 45, a portfolio can be more balanced. At this stage folks are in good shape if half of their total net worth is the value of their home and the other half consists of stocks and bonds,

http://ibs.smartmoney.com/consumer/
index.cfm?story=20060906&nav=
ibs&ibshatkey=pro

Anonymous said...

American Housing Horror Show: Twice As Many Units Built Than the Demand!

To add insult to the injury, 70-90% more homes are being built RIGHT NOW due to the pipeline of the bubble period.

During June 2006 more single-family homes were completed than at any other time prior to 2006!

This will continue for another year or so and the supply situation will keep on getting uglier and uglier.

As the Housing Over Supply Horror Show plays out over the next year or so, no one will be able to prevent the US economy from slipping and sliding into a recession, which will easily become a depression due to the Peak Debt coming into play.

As it happened following the shallow recession of 2001, people will double and triple up to reduce the number of housing units that are occupied (yes, during 2002 that is what precisely did happen).

Moms and dads, get ready to have the junior and the miss move back in.

Soon, the US will have 20,000,000 "empty housing units year round."

Construction industry will be in a depression for a very long time once the current pipeline is finished (some will not be finished, though).

http://www.safehaven.com/
article-5841.htm

Anonymous said...

Now, H&R Block Inc. (HRB) brings ‘subprime' even more to the fore as it has warned the Street of losses at its struggling mortgage unit. Why?

It's because of the increased numbers of ‘subprime' mortage customers falling behind on their loan payments.

As most investors know, a bull market and a decent economy can hide a lot in terms of marginal business practices. Add low interest rates to that list as well.

When times are good, housing ! prices are soaring and interest rates are low – mortgage companies can afford to be lax when it comes to who they're loaning money to and what standards they might apply to borrowers. Even customers without great credit deserve a loan and a dream – that is, until those variable mortgage rates start going against them and the loan officers comes a-callin'.

That's exactly what you're seeing now in the housing market and home loan industry – and the results are trickling into the stock market as well.

With high energy prices, higher interest rates and falling real estate values, it's tough enough for the average homeowner with good credit and a stable income to cover his daily expenses.

For a subprime borrower, that task now looks even more daunting – and H&R Block and others are feeling that pain, some of which was of their own doing.

That Housing Bubble

It was always going to be a ‘smooth landing' – this ‘housing bubble' thing. Pric! es might soften but the real estate market surely wouldn't collapse!&n bsp; Time to rethink this a bit.

Numbers out last week revealed that new US home sales sank 4.3 percent in July from June, while the inventory of unsold new homes jumped to a record 568,000.

This report came just one day after the real estate industry reported sales of existing US homes fell 4.1 percent in July to their lowest point since January 2004.

The fallout here is three-fold. First is the fallout within the real estate industry itself – the homebuilders, contractors and real estate professionals whose fortunes were tied to the recent boom.

The second is the loss of perceived wealth people had imagined was locked up in their homes, allowing them to freely take on refinancings and second mortgages.

And third are the aftershocks felt within the public markets where investors even in second tier financing players such as H&R Block are now taking the hit for sloppy business decisions.

Did H&! ;R have to get into the business of loans to ‘subprime' borrowers? Probably not. Is it now paying the price? Absolutely.

H&R Block estimates it will need to repurchase a pretax total of $102.1 million in loans, with the company stating that $46.1 million of the loans were sold during the quarter ended July 31, and $56 million were sold in previous quarters.

(The loss will be recorded in the company''s fiscal first-quarter results due out Aug. 31, with the company stating it would take a charge of $61.3 million, or 19 cents a share.)

Wall Street wasn't thrilled. UBS cut its rating on the stock to neutral and many of the other subprime lenders – including IndyMac Bancorp Inc.

(NDE) which runs one of Southern California''s largest savings and loans, and subprime mortgage lender! NovaStar Financial Inc.

(NFI) – felt the aftershocks of H&R Block's announcement.

I suspect that this remains only the tip of the iceberg. The housing market is now flooded with inventory at a time when aggressive loans to subprime borrowers are being readjusted upwards.

Those that can't afford their new monthly mortgage payments are going to have to punt, and the companies that lent to these subprime borrowers are going to suffer several – if not many – quarters of write-downs.

Investors would be wise to stay away from the sector entirely, not just on the real estate side, but to also steer clear of the adjacent satellite financing industry that wound itself around it.

http://ca.us.biz.yahoo.com/opt/
060905/
0e56099fd622e6b914eacb9101b6e6c3.
html?.v=1

Anonymous said...

Not all bad news. Job Reports says that wages rose More than Expected.

A Labor Department report that wages rose at an annual rate of 4.9 percent in the second quarter, above the 4.2 percent the agency estimated, was an unpleasant surprise for a market that had reached three-month highs on hopes of stable rates.

For the first quarter, the department said labor costs jumped 9 percent - the largest quarterly rise in almost six years.

However, this put more pressure on the Federal Reserve to continue raising interest rate on Sept 20.

With Central Banks buying more MBS this should put a squeeze on lender profits.

http://biz.yahoo.com/ap/060906/
wall_street.html?.v=31

Anonymous said...

Some of the biggest buyers of Fannie Mae and Freddie Mac debt are foreign central banks, which have purchased about $116 billion of agency bonds this year, almost three times the $44 billion Treasuries they acquired, according to Fed data.

Unfortunately, the declines at Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac may continue as the first real estate slump since the 1990s causes lending to contract by 19 percent this year, according to the Mortgage Bankers Association, a Washington-based trade group.

http://www.bloomberg.com/apps/
news?pid=20601087&sid=
aqnQT4X2L884&refer=worldwide_news

Anonymous said...

Congratulations. Recognized as Blog Top site...

Wow...

http://www.blogtopsites.com/sitedetails_16396.html

Anonymous said...

San Diego reporter attacked on camera (Warning: graphic video)

September 6th, 2006

Journalist John Mattes, a San Diego investigative reporter, was attacked by the husband and wife who were at the center of one of his reports on consumer fraud and deception. The husband and wife were arrested. Mattes was treated at the hospital and released. Jim Patton reports. Warning: graphic video and language

http://www.ktvb.com/sharedcontent/
VideoPlayer/showVideo.php?vidId=
86121

Anonymous said...

What's been needed for a long time is affordable housing. Here in Florida, it's the McMansions that aren't selling, and the problem of homwowners insurance in this state where insurance on a 35 year old home MILES away from any beach can easily run $3,500 a year. At least here in the south there is the OPTION of a manufactured home. I custom ordered mine from the factory and got crown molding, KitchenMaid cabinets, granite countertops and an island kitchen for just under $90,000. Add $25,000 for a lot just outside the city limits, I've got city sewer and water and paved streets, and a 2200 square foot home on a .33 acre lot for about $115K.

Anonymous said...

Islamic Republic News Agency reports that Ahmadinejad intends to travel to NYC, hopes to speak at UN on Sept. 19 at 7 PM; same day as Bush [whose speech is set for 11:30 AM] and day before Hugo Chavez... Both Ahmadinejad and Chavez will fly from Havana where they will see Castro... Earlier, Ahmadinejad said he was ready for debate with Bush at UN General Assembly...

Anonymous said...

What's been needed for a long time is affordable housing.

Affordable high rise condos are being built in Downtown Orlando, I read, with Gov Welfare to help prop up rising cinstruction costs and thicken the developers bottom line as enticement. They have already broken ground for the mixed use property.

Would this drive down prices even more because the comps are skewed?

Sorurce: OrlandoSentinal.com
Real Estate

Anonymous said...

Watch out, exposing the real estate fraud could get you attacked !

http://www.cnn.com/2006/US/09/07/reporter.attacked.ap/index.html

Anonymous said...

They said my house is worth $600,000! But I don't even get offers at $500,000!
What's up? I owe $490k! If it goes lower might just mail them the keys!
Upside down in California

Anonymous said...

There's no crash unless you bought a house at end of 2005!

When my property is up $300K and down $25K... IRS considers that as capital gain... not loss...

Jip said...

Interesting article about someone in Seattle, WA selling 296sq ft lofts for 150K:

http://seattlepi.nwsource.com/local/283265_tinycondo31.html

Anonymous said...

THIS IS Absolutely AMAZING!!!

The first of MANY MANY stories like this to come

Guy accused of Real Estate Fraud in San Diego kicks the crap of a reporter

You tube Link

http://tinyurl.com/fa6ee
http://www.youtube.com/watch?v=Thn2BGOj31I&eurl=http%3A%2F%2Fconsumerist%2Ecom%2F

FC John

Jip said...

Saw that on CNN last night FC John. It was the guy AND his wife. Ugly stuff....

Anonymous said...

Copper Leaf in PHX all sold out!

http://www.trendhomes.com/cl-plat.html

Anonymous said...

Home appraised in late March here in San Diego for 725k. Put this home on market mid July at 695k! A couple lookers early on, but nothing, Not one showing since Aug. 11 !
No offers, not even a low ball!

Anonymous said...

California is in a free fall with no parachut. I know some that can't even sell for their buy price from 2004! No buyers, and thousands of for sale signs. This could be the big one. "Grapes of Wrath II", but this time we're all going to Oklahoma and Texas in our BMWs and Mercedes! Do they have a Trader Joes in OK. Pray the lease holder doesn't come after us!
Upside down in Cal.

Anonymous said...

``The housing bubble is breaking pretty hard here,'' said Michael Bugno, president of equity strategies at Chicago Futures Group. ``Investors are going to get pretty nervous about the economy. It's not going to be market friendly.''

http://www.bloomberg.com/apps/
news?pid=20601087&sid=
atqshvxHc8LE&refer=home

Anonymous said...

KB Home Cuts Full-Year Forecast

"Our earnings expectations for the third quarter and full year reflect an increasingly challenging housing market, where the supply of new and resale home inventories has built up in recent months in markets that have experienced rapid price appreciation or substantial investor activity, or both, in the past few years," said Bruce Karatz, chairman and chief executive.

http://www.chron.com/disp/story.mpl/
ap/fn/4168308.html

Anonymous said...

``The housing bubble is breaking pretty hard here,'' said Michael Bugno, president of equity strategies at Chicago Futures Group. ``Investors are going to get pretty nervous about the economy. It's not going to be market friendly.''

http://www.bloomberg.com/apps/
news?pid=20601087&sid=
atqshvxHc8LE&refer=home

Anonymous said...

This planet better wake up fast and start eliminating trash like this ON THE SPOT!!!!!

http://www.thesmokinggun.com/archive/0906061grave1.html

Anonymous said...

Wife and I decided to stop paying our "rip off" ARM loan. How long will the bank let us live here? Got the moving van scheduled to move my stuff to a storage unit in my mother-in-laws name, and the keys are ready to be mailed in. I'm up rooting all the plants I planted, and taking all the improvements off. "Scourched earth" policy is to be enacted. Got my trailor all out fitted to move to my buddies lot in the Sierras, and I'll be fly fishing will Rome burns. Let them eat keys! Hope the Fed. and chairman B. are listening.
Upside down in Cal.

Anonymous said...

"Anonymous said...
Wife and I decided to stop paying our "rip off" ARM loan......."

Best of luck to you, BUT, either way the bank and/or the IRS
are coming after you. If the bank sells your place at a loss, you still owe the difference (remember that little piece of paper you signed, what was it called, Oh Yea: A CONTRACT!) If the bank writes off the loss, The IRS wants income tax on the difference since that now counts as income. The only way out is to have absolutely no seizable or traceable assets.
My one relative has a high demand, good paying job, lives out of his beat up 30yr old small motor home, goes all over the country, hasn't paid taxes since the late seventies and doesn’t care. The last time we talked about our different lifestyles, he said the he owed over $60,000 plus interest and penalties. He has nothing worth seizing that makes him worth the IRS's time, and lives paycheck to paycheck. People like him are the IRS's worst nightmare! While you can go to jail for making false statements on your tax forms, if you simply DON'T FILE, the most they can get is taxes owed, interest, and penalties, when the catch you, IF you have anything worth seizing to sell
to generate the cash, which he does not!
For years I looked on him as an irresponsible idi

Anonymous said...

idiot. Lately I'm beginning to wonder who is the bigger idiot.

Anonymous said...

SOME GOOD NEWS IMO

Don't sell right now if you don't have to. If you do have to sell, do it now, even if you have to reduce your price. The national or some regional markets may ultimately correct to 10%-20% less than current market valuations, especially in formerly hot markets like California, Arizona, Nevada, Washington DC Metro, New York, Florida and the Carolina's. It may take 5 to 7 years for these markets to recover to 2005 price levels.

2. If you are in a mortgage that has features that call for payment increases or adjustments within the next two years, see if your current lender will allow you to convert to a fixed rate product. If not call the National Mortgage Complaint Center Http://NationalMortgageComplaintCenter.Com to see what your options might be. The Complaint Centers toll free number is 866-714-6466.

3. Consumers should not fall for some advertising gimmick from a mortgage firm/bank or homebuilder offering a 1% start rate on a mortgage or 100% financing. Why would anyone want 100% financing in a nationwide real estate market that could see values decline 10% to 15%+ in the next two years? Put another way "why purchase something that at least in the short run may not retain its value"?

4. If you are a potential real estate buyer the Homeowners Consumer Center ( Http://HomeownersConsumerCenter.Com ) & the National Mortgage Complaint Center strongly suggest you wait to see how far real estate values go down in your area before you purchase a home or investment property.

5. While real estate market prices may decline, the rental market should stay intact. Homeowners unable to sell their existing property should consider renting their property until the real estate market begins to recover. This may be the best option for many homeowners to actually hold onto their property.

For Mortgage Lenders, Mortgage Bankers & Homebuilders the National Mortgage Complaint Center Suggests; Clean Up Your Act.

The mortgage process should be simple and transparent with consumer friendly approaches to fees; par interest rates, yield spreads and pre-payment penalties, etc. Martin envisions a future, with flat fee- A-type mortgages, and flat fee title insurance. In other words the same thing that happened to the stock market with respect to flat fee stock trades is about to happen to the mortgage and title industry. "Its no longer a question of if, at this point, it's just a question of who figures it out first and takes over the mortgage/title industries".

The echo generation is now in high school or college (the largest generation of possible homeowners in our nations history). Within four to six years they will become potential home buyers or renters. By this time, we believe the market will have corrected and appreciation will begin again. By then it is the hope of the Homeowners Consumer Center that there will be much more conservative approaches to real estate valuations and deceptive mortgage products/fees will have been outlawed.

Anonymous said...

Seems like good timing?

Calling all would-be carpenters, roofers and electricians: local workforce development officials are hoping to train 1,000 people in the coming weeks for entry-level work in those industries facing a critical shortage of workers.

The free training and job placement is part of Florida ReBuilds, $12 million state program that aims to train 10,000 entry-level workers for the construction industry by next June. Programs can last anywhere from two weeks to eight weeks.

''The need is so urgent we need to have as many people as we can as quickly as we can,'' said Linda South, director of Florida's Agency for Workforce Innovation.

South Florida Workforce, the local arm of the state employment agency, is conducting the training in Miami-Dade.

There are at least 13,000 immediate openings throughout Florida in the construction industry, due to demand from building and hurricane repair, according to government estimates. Projections of future job needs call for even bigger demand, as skilled workers within the industry retire and few younger people enter the trades to take their places.

Roccman said...

The power is coming back to the people!!!

Walk...

Walk away from ARMS...from contracts...from all of it... just walk. There is no downside!

Chase, the Rocks, Roths, etc can eat keys.

This is the show of a lifetime!!

Walk-on Brother!!

Anonymous said...

Perhaps, some of the prognosticators on this blog can take a stab at what a government bailout for this "pop" might look like?

Maybe this would be better served in a different thread, but I haven't seen this question addressed at all. We're (like it or not) well on our way to a Democratic house come January, right as this thing is in full swing and the politics of the last 30 years seem to be to bail out anyone lacking in personal responsibility.

I'm a reasonable smart man, but I honestly don't know how this all plays out with Uncle Sam being the X-factor. Are "his" hands completely tied, or will we see a market massaging ala dot-com bust? My biggest fear is all us "bitter renters" with cash on hand get overtly screwed by a devaluation of currency...

Does anybody truly believe the government is going to sit idly by while 75% of it's "first-class citizens" take they licks they've rightfully got coming? If so, can you point to one instance in the last 30 years of this great country where that has happened?

Another one to potentially ponder, doesn't the downslope have its own built-in limiter? If I'm a professional in another country, doesn't a depressive real estate market in the US make for a nice chance to head for the "land of opportunity", thereby, creating a demand on housing somewhere along the curve before true-bottom? Wouldn't the country as a whole stand to benefit by relaxing our legal immigration policies to increase demand and, quite frankly, grab a few of the world's "motivated, rich and strong" along the way to buy housing at a discount from our home-bred "tired, poor and weak"?

Please, somebody, convince me I missed the mark somewhere and that we are going to see a return to normalcy some time soon. I think, quite frankly, it's high-time the US took it on the chin to rectify some of it's "I want. I want. I want." toddler attitude and turn back to the principles that made this country great in the first place.

But, alas, I think it may be better off to jump into a house I can't afford with a loan I can't understand and just wait for my rich Uncle Sam to bail me out.

Anonymous said...

If anyone wants a good laugh check out today's Wall Street Journal (9/08) Personal Journal/Real Estate Section. There you'll find a story about a singer from the band 311 who bought a private island in the Florida Keys for 3 million 3 years ago. Anyway, he's admitted that he's mortgaged to the hilt and has had to renovate the island's main house twice due to hurricanes. Not being greedy he only wants 10 million for the place. He goes on to say that you shouldn't waste his time offering 9,999,999. This prick has incredible chutzpah by pretending to be put out with only making a 200% + return over a 3 year period. I am a dork who isn't up on the current music scene but I have never heard of the band 311. If there is any justice in the world I hope his gay little band turns out to be a one hit wonder and I hope he goes broke on account of his hubris.

Anonymous said...

Getting another car in mother-in-laws name, and they can't find me in the Sierras. Contact! Who cares! I got my cash and serious attitute. Jingle mail here we come!
Upside down in Cal.

Anonymous said...

They can keep their contract and the jingle mail all the same location! You can quess where that is!
Upside down in Kal.

Miss Goldbug said...

THe KB Troll said:"The stocks, he says, have reached levels that make some sense. "You will soon see some upgrades from the good analysts" in the sector, namely the ones who were smart and downgraded the stocks over the past year, the manager says".

LOL, when pigs fly.

Anonymous said...

The massive speculatory bubble and its farce of a offshoot, the Real Estate bubble are near end!!!!

THE TIME IS NOW!!!! The end is near my friends, this September 2006 will be the end of the Real Estate bubble, a end of a dynasty, the end of a golden age.

One of the major homebuilders has under the headline, announced 75% of its workforce to be disbanded beginnig this November, as they prepare signifigent production cuts for 2007. Take a pick, who it was.....

With this bursting collapse becoming magnified in October with the burst bubble and awfull debt, Equities will collapse under their own weight, another black weekday will sour the land before Halloween. Bleak, very bleak.

Amazing that it is over. The recession is nearing, the bleakness is all that is left.

AHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!

Anonymous said...

I think I'll wait to the Christmas season to mail my "jingle Mail". Won't it send a festive spirit through the bank's office Christmas party!

Jingle Mail! Jingle Mail! Jingle all the Way! Oh what fun it is to get jingle mail today! Oh!

Upside down in Cal.

Anonymous said...

Danimal:

You've hit the right tune in relaxing legal immigration and bring in the bright minds. The problem is some isolationist and restrictionist have been listening to PJB and the "nut head" Tancredo, so what you have is an angry reaction towards immigration in general. These yahoos complain about our economy, but they're not contributing anything, other tah whine and targets some minorities for being here. In fact, because of their low education, they're more of a liability than an asset. They're probably on welfare too, but they are the loudest.

Anonymous said...

Housing crash in NY started 5 years ago. Many with interests only loans jumped off WTC on 9/11.

Anonymous said...

"Wouldn't the country as a whole stand to benefit by relaxing our legal immigration policies to increase demand and, quite frankly, grab a few of the world's "motivated, rich and strong"

Well... legal immigration for the rich has always been available. It's called the investor visa.

The process for H1-B work to permanent residency is the more ardous path. And those loopholes have been used by employers to exploit their workers.

The best and easiest path, however, is to get married.

Anonymous said...

Anon 1:19:37,

Thanks for the input, but we are not talking about HOW to legally immigrate here in the U.S. What we are talking is increasing legal immigration in order to support the failing economy.

Anonymous said...

:What we are talking is increasing legal immigration in order to support the failing economy.

In order for legal immigration, at this point in time, to save the day is for well off individuals (and families) to arrive here with cash and pre-existing businesses at hand.

It does no good for a middle class worker visa person to arrive and work for a normal company just to compete against not only Americans and green card holders but other H1-Bs who the companys have been exploiting anyways. Remember, American companies are sending work overseas and don't care one way or the other in a race for the bottom.
At this point in time, H1-B programs should be eliminated and replaced by conditional green cards (2-3 years holding pattern) and thereby, keeping the employers honest. The conditional green card has been going on, starting in the 1950s up until the 80s when the system went berserk with temp visas. Also, family immigration is a well established practice for bringing over siblings, cousins, adopted children, etc.

Now, a businessman, however, bringing an existing business here can hire a dozen people and infuse cash into the system. The problem is that nowadays, opportunities to start a pre-capitalized business has been Walmartized and the value added type of work is easier to setup abroad for a person with deep pockets. This is where the govt needs to come up with some incentive.

Anonymous said...

"Grunwald reports that the nation's affordable housing crisis is deepening, and not just for inner-city families on welfare. The problem has climbed the income ladder and moved to the suburbs, where service workers cram their families into overcrowded apartments, college graduates have to crash with their parents, and firefighters, police officers and teachers can't afford to live in the communities they serve."

Welfare, firefighters, blue collar people? Hell, I am a white collar patent attorney in DC making a pretty good amount of cake and I can't even afford a 2 bedroom POS! Yet, there are all these clowns riding around in convertible BMW's, Mercedes' and the like, WTF?!!! The only thing that I can think is HELOC and their cashing in on their 100-200K in paper "equity."

Anonymous said...

Is Van Morrison not the best musician, or what?

Anonymous said...

Anon 3:30:43,

Last comment from me about immigration, but you've brought up a good point. If I may add, dependents of this so-called "conditional visa" should not be entitled to any entitlements such as social security. The bottom line is, if you have not contributed to the system, you're not getting anything back.

The outsourcing of jobs, I think we just have to "suck it up," because other third world countries have well educated people who can do what we can for a lot less. Time will come that they will probably demand for salary increase, and that will somewhat, though not near, level the playing field.

The strategy is for us to be more creative, a lot smarter than the third world people. The problem is our science and math which are the very core of the foundation - sucks! Thus putting us way behind other countries like China, Singapore and India. The funny thing is that they may have a strong accent and some of us tend to laugh about it, but they're hell a lot smarter than us.

That's where we're good at - make fun of other peoples race.

Anonymous said...

ICanTotallyOutBelchYou
Man are you right on. I would much more like to be in your shoes in the rental swigging 2 buck chuck in Mt. View and watching all the sheep get slaughtered. When this thing is all done with, in about 7 years or so, no one will want to even touch real estate. It will be like it is radio active! Japan lead the way! See what happened there.

Anonymous said...

I'm almost there! I going to have a key sending party when I mail the bank the keys. I'll send it directly to the bank's Pres. It feels good getting that monkey off my back! Wife owes more than the GDP of Bangladesh on her visas and masters. What choice do we have! No way I can pay this in a life time! I'll keep you posted about the exit strategy.
Upside down in Ca.

blogger said...

upside down I just gave you your own thread. fascinating.

Anonymous said...

How about site , why not post something on that for a change?

Anonymous said...

I was watching "Flip this House" last night. This guy was fixing up a Watts LA house. The house was really nothing to get excited about. What I can't understand is he bought it for $245K and sold the finished result for $400K+. I couldn't believe it. I thought it should have gone for about 125K or less. Will CA drop into the ocean to get these prices corrected?
Roidy

Anonymous said...

REQUIREMENTS FOR FULL TAX DEFERRAL

A properly structured exchange is the transfer of property for property, thus deferring capital gain taxes. Any cash received, any reduction in mortgage or any other non-like-kind property received is considered "boot" and is taxable to the extent of the capital gain. To fully defer all capital gain taxes, an Exchanger must meet two requirements:

www.ExchangeCA.com





La Jolla San Diego Real Estate Homes, Condos, Multi-Family, Houses, Investment Property, -- Bay & Ocean View!!!

Anonymous said...

Re: Robinson...

I never understand why these guys can make billions, and when they get old they become senile communists. Listening to his rant is like listening to Soro's. Why would rich people side with the lefty's? Are they mad since they could not buy George Bush, unlike Clinton who was for sale (Frank Rich?)

Anonymous said...

Anonymous said...
Re: Robinson...

I never understand why these guys can make billions, and when they get old they become senile communists. Listening to his rant is like listening to Soro's. Why would rich people side with the lefty's? Are they mad since they could not buy George Bush, unlike Clinton who was for sale (Frank Rich?)

Right on! You cannot buy GW. He is already bought and paid for(i.e. sold out).

Anonymous said...

It is probably because "Soros" isn't a 'lefty'. I can't believe that linear term is still used. Move on and transcend.

Anonymous said...

Incentives anyone?

Appliances! Plasma screens!
New cars! Swimming pools! $25k in landscaping!

JUST LOWER THE PRICE ALREADY!

Anonymous said...

Bubba2friday,

"Liberalize immigration..."

No, I don't think that will happen. Yes, China plays a major role in our economy, but China is very nationalistic. In fact most Chinese who comes here were escapees from their country. The Chinese government will not allow its citizens to leave the country, because of exploitation.

So, in that respect, you don't have to worry about it. However, if liberalizing immigration is a possiblity, I would lean on SKILLED immigration. We need the best and the brightest and not the uneducated who will likely become a menace to society.

Anonymous said...

Check this out!

N.A.R. President Thomas M. Stevens can sell his home! It's been on market for 1 yr. By not following the advice from his agents and lowering price at the onset!

Greed and stupidity knows no bounds!

From Washingtonpost.com 9-9-06

Anonymous said...

I meant CAN'T SELL his Home!

Anonymous said...

I'm a Dumbass!

Anonymous said...

"I would lean on SKILLED immigration. We need the best and the brightest and not the uneducated who will likely become a menace to society."

Guys, WWII and the Cold War are over.

The days of the stereotypical brilliant Hungarian physicists coming over to build America's tech prowess are over. Yes, many of the brightest from eastern Europe are already American today and have retired.

Anonymous said...

Are you trying to say that since the end of WWII and the Cold War, Americans have gotten brighter and the rest of the world has gotten dimmer?

Really? That's we're you're trying to say?

Because if that's the case, let's just skip to the part where the worldwide nuclear annihilation starts so at least I can catch a good fireworks show!

Anonymous said...

Those N.A.R. people were really out of touch with reality. That's the result of too much spinning and lying, such that they were able to convince themselves. If it's not stupidity, I don't know what is.

Anonymous said...

How about , why not post something on that for a change?

Anonymous said...

How about Dog photo web pages. Dog breed pictures and information, dog stories, dog photo galleries, puppy pix, puppy gallery... , why not post something on that for a change?

Michael Nystrom said...

Here is an excellent eyewitness account of a very similar situation in Japan. This author was there during the stock/housing bubble in 1990 - 1994. Housing prices fell by over 50%. It happened there; it can happen here.

A Cautionary Housing Tale from Japan

A great article from a great website.

Bull! Not bull

Anonymous said...

UNION STATION PROJECT CHANGES

Planned Condo Complex Flips to Rentals and Gets a New Name

The company had a deal with the project's owner, Dallas-based Lincoln Property Co., to turn the 272 units into condos.

"With delays to get buyers into the building and the softening market, we came to the conclusion that we would not go forward with this project," said Steven Ross, Standard Pacific's director of planning for the Los Angeles area.

Located at the corner of Cesar E. Chavez Boulevard and Alameda Street, the $34 million project had already surprised expectant tenants earlier this year when it sent out letters offering deposit refunds just months before the move-in date.

Lincoln Vice President Reg Delponte said that the project, now renamed Mozaic, is already starting to lease units as rentals. Occupancy will begin within a month.

"The reality is that we were really excited from the beginning about our transit-oriented position, and we have always been excited about it as a rental location," Delponte said. "We always thought that Downtown needed more rental inventory."

http://www.ladowntownnews.com/
articles/2006/09/11/news/
news03.txt

Probably more and more High Density
Condo will turn back into Rental
forcing the price of rents to go down in many big cities like San Francisco, New York, Boston, etc.

Anonymous said...

Keith,

You should link this webpage.

"Housing Bubble Central"

http://bubble.mynn.com/

Anonymous said...

loaf OF bread and some eggs

Anonymous said...

Homebuilders Get Pay-for-Performance's Easy Half: Graef Crystal

The folks who run the nation's largest homebuilders are about to be put to the test.

They were paid wildly during the housing boom, which now shows signs of turning into a bust. So will pay-for-performance work in reverse? Will the pay of homebuilder chief executive officers, having defied gravity, succumb to the laws of basic physics?

I analyzed last year's total CEO pay packages at 11 major homebuilders, and they averaged a stupendous $24 million a head.

(Total pay is the sum of: base salary; annual bonus, my estimate for the present value of stock options granted in 2005 and measured using the Black-Scholes model; the value of free shares awarded in 2005; payouts in 2005 under other forms of long-term incentive compensation; and miscellaneous compensation. Pay information was obtained from Salary.com's CompAnalyst database.)

Here, in descending order of total pay, are the pay packages of the 11 CEOs. Next to each pay figure is the ``excess return'' of the company during its fiscal 2005, measured by subtracting the return on the Standard & Poor's 500 Index from the company's actual total return.

http://www.bloomberg.com/apps/
news?pid=20601039&sid=aAOCelLA5pRE

Anonymous said...

Sellers willing to negotiate

Cooled Fresno County market means buyers can arrange deals, such as paid closing costs.

With home sales in Fresno County off from last year by a third, sellers and real estate agents are more willing to negotiate.

Some people have been surprised at how quickly the real estate market softened because, unlike previous declines, this downturn is not accompanied by higher unemployment or a fundamental change in the economy.

"Nothing hurts more than a 'reduced' sign," said Chuck Adkins, a senior loan officer at Golden Horizon Mortgage Co. and the O'Briens' loan officer.

http://www.fresnobee.com/business/
real_estate/story/
12698450p-13395969c.html

Short Stories said...

My ohh my how things change in a years time!

Anonymous said...

patrick.net sure has an "attitude" blog entry recently.

This what HP should have done, but I'm glad SOMEBODY did it.

http://patrick.net/wp/

"Quotes that will live in infamy"

Devastating.

Anonymous said...

"The strategy is for us to be more creative, a lot smarter than the third world people. The problem is our science and math which are the very core of the foundation - sucks!"

In what sense? In the average level of knowledge, sure.

But on the real level where scientists and engineers go into industry & labs? (i.e. the top 1%?)

Hell NO! U.S. grad school science education is as rigorous as ever. The problem is a LACK OF JOBS AND CAREER PATH.

If you're Indian or Chinese you can always go home to a 10% p.a. growing economy which is hiring people like you like crazy and salaries are taking off.

In the USA you are booted out midcareer and have no chance.

I'm 38 and involuntarily unemployed for 6 months. I have a major research university PhD (Ivy league undergrad) and a good record, including dozens of peer-reviewed publications. I have not gotten one single phone call back on job applications.

Anonymous said...

Now your Advertising?

Anonymous said...

Appliances, upgrades, landscaping -- it's all 'free'

Builders turn to cornucopia of incentives to help keep valley's home inventory moving

Median new home prices up to $337,272 in July, a 16.3 percent increase from a year ago, Las Vegas-based housing research firm SalesTraq reported. Some real estate professionals say median prices would be much lower if builder incentives were factored out.

John Hatch of Venture Realty Group in Las Vegas said the highest concession he's seen at a new home tract was $48,000 on a $352,000 home on top of a 6 percent commission.

"The sales price was recorded as $352,000 and not the $304,000 which in my mind is actually what the home sold for," he said. "My question is, 'Does this accurately represent the market?' I think not."

On the resale side, Hatch said he has seen sellers give 6 percent of the sales price or more in favor of the buyer. These concessions have recently become the norm and not the exception, he said.

"So the people who say new home prices are falling are right 5.1 percent of the time. Those who say prices have stabilized are right 78.6 percent of the time. And those who say prices are rising are also right 16.2 percent of the time," Murphy said.

http://www.reviewjournal.com/
lvrj_home/2006/Sep-10-Sun-2006/
business/9085811.html

Anonymous said...

San Francisco installing security cameras in troubled areas

SAN FRANCISCO (AP) - San Francisco is installing 50 security cameras in the city's public housing projects during the next year and a half.


It's part of a renewed effort to make some of San Francisco's most crime-ridden neighborhoods safer.

The new cameras will cost between $4,000 and $7,000 apiece and will be paid for by the federally funded San Francisco Housing Authority.

Mayor Gavin Newsom says the devices are part of a larger effort to stem the spike in homicides.

But some residents of the neighborhoods say they're skeptical that the cameras will make a difference.

http://www.fox6.com/news/state/
story.aspx?content_id=
7940EEFE-5D0E-4727-8208-
3D9ACA8D021B

Anonymous said...

Lennar Corp. became the latest residential builder to lower its profit outlook Friday when the Miami company knocked down its third-quarter estimate because of a weakening market for homes.

"The U.S. housing market has continued to deteriorate," said Chief Executive Stuart Miller in a written statement released Friday morning.

Lennar (LEN) joins the steady stream of bad news coming out of the home
builders' sector this week which included multiple earnings revisions.

"Given difficult market conditions, we have limited our land purchases while we have remained focused on even flow production and minimizing completed inventory," said Lennar's Miller.

"We believe the company's aggressive sales incentives prevented a spike in Lennar's cancellation rate -- compared to the much higher [cancellation] rates of 53% and 50% for KB Home and Beazer, respectively

http://agedwards.com/public/qcn/
FinanceStory?primaryKey=
uA0030MKxCnE5ASDXtHcUt00&
newsCategoryKey=Finance

Anonymous said...

Have a Look.
Chart the bubble in any town!
Interactive graphics
http://paper-money.blogspot.com/

Anonymous said...

09/07/2006 25,448
09/01/2006 25,546
08/28/2006 25,588

Orlando Inventory down three weeks in a row.
A Question to ponder, is it sales or flippers who can't find gf's and are renting their spec homes rather than trying to sell?

Source; Housing tracker

Anonymous said...

How soon til we see the exotic cars, boats, yachts, private planes, helicopters, custom motorcycles hit the market?

Anonymous said...

At greatly reduced prices!

Anonymous said...

Location: freeway entrance, La Jolla Village Drive and I-5, San Diego.

Bright glow-brite yellow sign:

www.dumpinghomes.com


Until about 2 months ago, those locations frequently had those infamous, "Real estate apprentice wanted! $20k/month call XXX-YYY-ZZZZ" spam for who knows what.

Anonymous said...

"It's not the loan that's the problem,"

says Herbert M. Sandler, CEO of World Savings Bank, parent of Golden West.

"The problem is with the quality of the underwriting."

http://biz.yahoo.com/weekend/
mortgagepain_2.html

Anonymous said...

Check out the chart on the

"Existing home sales - Unsold Inventory"

http://www.globalcapitalonline.com/

Anonymous said...

"It's not the loan that's the problem"

cough cough.....


When somebody says, "it's not about the money", it's about the money.

When somebody says, "it's not about the sex", it's about the sex.

And when They say, "it's not about the loan", it's about the loan.

take it to the (Swiss) bank.

Anonymous said...

Allen Wastler said he is bubble sitting.

http://www.cnn.com/video/player/
player.html?url=/video/business/
2006/09/07/
delacruz.watler.housing.cnn&source=
money

Anonymous said...

Its not just the loan, its not just the realtor, its not just the flipper.
Well its mostly the flipper.

https://www.asseenontvnetwork.com/vcc/pei/carletonsheets2/904666/

"High school dropouts can do it"

Anonymous said...

HP word for the day: Misogyny

You guys are this.

Misogyny (/mɪ.ˈsɑ.ʤə.ni/) is hatred of or strong prejudice against women. The word comes from the Greek words μίσος (misos, "hatred") + γυνη (gunê, "woman"). Compared with anti-woman sexism or misandry (hatred of or strong prejudice against men), misogyny is usually regarded as directed against women by some men, though women can also hold misogynistic views. In feminist theory, misogyny is recognized as a political ideology - similar to racism or anti-Semitism - that justifies and maintains the subordination of women by men.

Anonymous said...

Thanks for the lesson..... there's the door!

Anonymous said...

How about this term: Faux Feminist

A person who expouses feminist theories and the equality of the genders but actually supports a matriarchy where women dominate both the social and financial resources of men but then simultaneously engages in sexual trysts with criminal (a.k.a. jailbreak) men because of an underlying view of the male species as animalistic than human thus converting the mating process into a metaphor of bestiality and S&M practices.

Anonymous said...

A-NON-Vagina...
You pointing that out to us men SCREAMS you are a C.U.N.ext.T.uesday. That and because Suzanne said so.

Anonymous said...

Borrr-ING. When will y'all move on to something else?

Anonymous said...

In all honesty, since sales are inevitably falling I see most of the condos being converted to apartments. People that can't sell their homes will turn to the rental market. Rental prices in Los Angeles increased about 5.3% on average where as last year it was at 4.7%. Demand is obviously increasing for rentals. I think that people are renting primarily because they are using a wait-and-see method, rather than purchasing homes, especially since there is so much talk about the bubble bursting. Depends on the market too though.

People are going to slowly realize that their homes are not worth what they are asking for and will either a) lower their prices, b) rent them out, or c) undergo foreclosure. You're going to see a lot more services pop up for los angeles and new york like www.movefrog.com that will help fill those vacancies and boost residential leasing.

Anonymous said...

How about MakeGIF 1.4 , why not post something on that for a change?

Anonymous said...

Wall Street is going to ackowledge the magnitude of the housing crash within the next 90 days. Expect a market correction of 10-30% when it does:

http://biz.yahoo.com/special/ invest091106_article1.html

Anonymous said...

State takes action against mortgage firms, citing alleged abuses

http://www.heraldtribune.co
m/apps/pbcs.dll/article?
AID=/20060908/APN/609080907

Anonymous said...

Market slowdown could trickle down

The red and white banner hanging outside the entrance to Lathrop's Mossdale Landing housing development can be seen from the freeway advertising "new lower prices."

In one of the neighborhoods featured on that sign, development company Beck Properties Inc. has slashed prices on some new homes as much as 11 percent

"The housing market is what it is. There's nothing we can do whether it's hot or cold," said Manteca City Manager Bob Adams.

The signs of slowdown are present in San Joaquin County.

University of the Pacific's Business Forecasting Center released in July, and the report's authors predicted developers might cut back on building in response.

So far, officials in Lathrop and Manteca say they have not seen any signs of cutbacks because the cities are still issuing residential building permits at a steady rate.

In Lathrop, for example, the city issued 682 single-family home building permits from July 2005 to June 2006, up 4.3 percent from 654 permits the year before. In the past two months, the city already is on pace to see another increase, issuing 187 permits since July.

Lathrop has as many as 20,000 new homes planned for west of Interstate 5 in the next two decades

http://www.recordnet.com/
apps/pbcs.dll/article?
AID=/20060911/NEWS01/609110
319/1001

Anonymous said...

Longtime Realtor Fred Medina doesn't want people to buy houses they can't afford.

But he hates a new state regulation designed to thwart predatory lending that requires certain borrowers to receive financial counseling before being granted a mortgage, because he says it will hurt property values on the Southwest Side.

The law's intent was to steer people away from high-cost, high-interest mortgages, which can lead to foreclosures and hurt neighborhoods by causing poverty and abandoned houses.

A spokesman for the law's sponsor, Illinois House Speaker Michael Madigan (D-Chicago), said the law will help drive out predatory lenders.

"Certain elements fought this bill tooth and nail," said Steve Brown, a spokesman for Madigan, whose district is in the targeted area. "It's not surprising that these elements and their allies have found new things to complain about."

Dean Martinez, secretary of the Illinois Department of Financial and Professional Regulation, said the program is "working more smoothly than we anticipated." He said he doesn't anticipate delays as a result of the law.

"Whenever a new law passes, people are nervous," he said. "We hope that the way we interpret the law, it will be a smooth, seamless process, and people's worries will be relieved."

Under the law, if a borrower working with a mortgage broker in an affected ZIP code applies for a loan, all of his credit information and terms of the loan are entered into a special state-run data base.

The ZIP codes chosen for the pilot program are "troubled" Chicago neighborhoods, although not necessarily the worst, in terms of the number of foreclosures, said Geoff Smith, project director at the Woodstock Institute.

If a borrower's credit score is 620 or less, or if there are other triggers, a borrower must get financial counseling from a U.S. Housing and Urban Development-approved counselor to make sure the borrower knows what he's getting into, though a counselor can't stop the loan. A borrower working through state or federally chartered banks is exempt.

The mortgage broker must pay the $300 fee for counseling. Every mortgage must include a certificate of completion or exemption before it can be recorded.

Real estate professionals complain that they don't mind the law's intent, but the devil's in the details.

"The bill's heart is in the right place," said Dan Green, a mortgage planner with Mobium Mortgage, who runs a blog that has been collecting information on the new law. "The means through which the law is structured may be having unintended consequences."

Potential problems include delays in closing, finding counselors, and nervous lenders who don't want to deal with the bureaucracy and so are getting out.

Real estate agent Rafael Alvarado, of Century 21 Salamanca in the West Lawn neighborhood, said the new procedures could add at least 34 days to the process of closing a loan.

"That's what's scaring people. They don't know how it will work," said Alvarado. He fears the law will lead to discrimination against sellers in the affected areas, since buyers could decide to go outside the ZIP codes to avoid the headache.

"If you're going to have a law on the books, apply it to all," said Alvarado. "It should apply to everybody or nobody."

He also said the law steers business to banks and away from mortgage brokers.

Kristen Komara, director of financial services for The Resurrection Project, said possible delays in the loan process are a legitimate concern. "Home sellers might say 'I don't want to wait for these buyers'," said Komara, whose organization will provide financial counseling under the program.

She said counselors have gotten together since they learned about the bill to try to make the process as smooth and consistent as possible, Komara said.

"Sometimes there's a lot of crying and yelling before people know what the true facts are going to be," Komara said. "There are things that could have been done to make it a better process, but at this point, it's going to be what it will be."

She said she wants lenders and brokers to know that counselors will work with them and not to be scared -- "unless it's a predatory loan."

http://www.suntimes.com/
output/business/
cst-fin-mort11.html

Anonymous said...

"The boom is definitely over, there's no debate about that," said Mark Zandi, chief economist of West Chester, Pa.-based research firm Moody's Economy.com. "Now the question is more how hard is it going to land, if it lands at all."

To get a sense of how home prices will perform in various parts of the U.S., we turned to Moody's Economy.com for historic and predicted median home prices in 15 major metropolitan areas. We looked back ten years and forward another ten. The results show several cities, including Boston, New York and Washington, D.C., experiencing ups and downs (more precisely, downs and ups) in coming years — a boon for buyers, perhaps, but not for current owners. Other places, such as Houston and Minneapolis-St. Paul, may just keep chugging along.

http://www.msnbc.msn.com/
id/14787588/

Anonymous said...

Snippy Things Folks Say About
Your Home Are Now Also Online

For years, amateur critics have reviewed books, music and chain saws on the Internet. Soon they may be posting online critiques of your bathroom.

Operators of two real-estate Web sites, ZipRealty Inc. and Reply Inc., in August began encouraging customers to write reviews of homes available for sale. Early submissions suggest it might be better not to know what strangers really think about your house.

Another Zip reviewer was even harsher in a review of a three-bedroom house in San Clemente, Calif., listed at $769,000: "This very small home has great interior upgrades, but the entire backyard is taken up by an unsightly swamp...Can you say, West Nile Virus?" The listing agent, Sherry Klapp, says the water in the backyard is a pond for ornamental fish, not a swamp, and was "professionally done."

http://www.realestatejourna
l.com/buysell/markettrends/
20060907-delaney.html

Anonymous said...

Real Estate Recession Coming

By ROBERT Z. ALIBER
September 12, 2006
URL: http://www.nysun.com/article/39480


The housing market now is increasingly a buyer's market. One of the major builders of luxury homes reported that both its third quarter and full year earnings "would fall short of its previous forecasts as a result of slower sales." The firm noted that "high cancellation rates on contracts in backlog that were projected to close this year, and more pronounced use of price concessions and incentives, particularly on the resale of those homes which have experienced contract cancellations."

Some realtors and economists now argue that the decline in home prices will be modest and is nearly complete.

They are very likely to be mistaken.This decline is just beginning and will become more severe because of a recession that will be triggered by the falling home prices. This in turn will lead to a surge in unemployment and many of the newly-unemployed will no longer be able to afford their homes.

The first factor that led to the unprecedented surge in home prices of more than 50% in the last five years is that the Federal Reserve began to pursue an extremely easy money policy in 2001 to buffer the economy from the implosion of the stock price bubble of the late 1990s.

Nominal interest rates declined to 1%,and since the inflation rate bounced around 2%, real interest rates were negative. The combination of low interest rates and the ready availability of credit led to a surge in home prices that in turn led to exceptionally high levels of both new construction and remodeling — new kitchens and bathrooms. Moreover the surge in household net worth that followed from the much higher level of home prices facilitated borrowing. People used their new collateral to pay for autos, vacations, tuition, and even daily living expenses.

The second factor that drove home prices upward has been the creativity of the lenders in developing new forms of credit. Financial firms became much more creative in designing mortgages that reduced the monthly payment of the borrowers and thus enabled them to buy more expensive properties. More borrowers opted for adjustable interest rate mortgages, or ARMS. Some provided only for interest payments for five or ten years. A recent innovation was the negative amortization mortgage, sometimes called the option ARM. The interest payment that the borrowers made for three or five years was less than the amount required based on the interest rate, and the borrowers' indebtedness increased.

The expansion of private mortgage insurance meant that many individuals could buy homes for the first time. Their purchases induced significant increase in the prices of starter homes, and the owners of these properties realized large capital gains and spectacular increases in their net worth and so they traded up to more expansive homes.

Finally tens of thousands of individuals have purchased homes and apartments in anticipation of large gains on their small investments. Condo flipping became commonplace and for several years the practice was extremely profitable.

Most of the surge in property prices has been on the Pacific and the Atlantic coasts and especially in warm weather areas; home prices in the Midwest and in Texas have not increased significantly. Prices have doubled in the southern California and south Florida.

The Federal Reserve reversed its easy money policy in the Summer of 2004 and then began to increase interest rates slowly and steadily. Interest rates on some adjustable rate mortgages are now twice as high as they were three years ago. Home foreclosures began to surge about six months ago, especially in Indiana and Ohio and other states that have experienced job losses in the automobile industry. Foreclosures also have increased in Colorado and other mountain states and in southern California.

Some impatient sellers have auctioned their properties. The sales prices often have been 20-30% below the previous asking prices. Moreover the sellers incur marketing and other costs that often are 10% of their selling prices, about twice as high as the traditional real estate sales commission.

Government regulators will require that the banks that have taken title to homes in foreclosure sell them. The prices of these properties will decline by 20-30% or more.

Moreover many of the investors who bought homes in Florida, Arizona, Las Vegas, and Southern California in anticipation of quick revaluation profits will put these properties on the market, often at prices significantly below their purchase price.

The supply of homes nationwide for sale is much higher than at any time since the early 1990s, about equal to six months' sales. In part the increase in the inventory of unsold homes reflects a stalemate — buyers are waiting for prices to decline further while sellers are reluctant to reduce their asking prices in anticipation that there is an eager buyer just over the horizon. Most of these sellers will be disappointed. The current market value of their homes is below and in many cases significantly below their current asking prices.

In the next few months more and more of those houses on the market will reduce their asking prices, both because of the mounting costs of owning unoccupied properties and in response to the price reductions by the major home builders who will be seeking to reduce their inventories of newly built and unsold homes.

Moreover no builder is likely to put a shovel in the ground to start a new project until home prices stabilize.

Financial markets have already responded. Share prices of companies that are major home builders have declined by 30-50% in the last year.

The decline in spending that will follow from the combination of the sharp decline in new home construction and the much smaller borrowing against lower home values will lead to a sharp increase in the unemployment rate. Foreclosures and price drops will follow.

The decline in household wealth that will follow from lower home prices is likely to be comparable to the decline in 2000, 2001, and 2002 that followed from the lower stock prices. Moreover the sharp slowdown in the rate of economic growth is not good news for corporate profits.

U.S. equity prices declined by 40% in the three years after the bubble imploded. The decline in property values on average could be as large, and because of the regional character of the bubble, much larger in what had been the hot property markets.

The New York area will be sharply affected both by the decline in home prices and in stock prices. Homes in the metropolitan area will remain more costly than in most other parts of the country, but they will become much more affordable than they now.

Mr. Aliber is professor at the University of Chicago's Graduate School of Business and president and chief investment officer of Dorchester Capital Management.

Anonymous said...

I'm perplexed. Thanks to this site and others, my husband and I got educated on the market and put off buying a house til 2007 or later. Thank you for the info by the way.

I have to admit though that I am beyond confused by the stock market. The bad economic data comes out almost daily yet the stock market has decent gains practically everyday. Being a stock holder - I'm happy of course that the market is halfway towards 12000 pts but just wondering when, if ever the other shoe is going to drop.

Since the economy has been succeeding on the shoulders of the housing boom, why hasn't the stock market reflected it's pullback?

Anonymous said...

Bob Toll:
-----------------
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bDFF933DD-D746-4A56-AFB5-A53A916DF126%7d&siteid=yhoo&dist=yhoo

BOSTON (MarketWatch) -- Toll Brothers Chief Executive Robert Toll said the U.S. housing market got ahead of itself due to greed on the part of buyers and sellers, and that it now likely faces the highest level of speculative inventory ever. Toll said the current downturn is unique in his experience because it wasn't driven by a "macro-event" although interest rates have risen steadily. "Every day there's an article about how lousy housing is now and how dumb you have to be to buy a house now," the CEO said Tuesday at the Credit Suisse Homebuilders Symposium. "I don't know what it will take to turn this market -- it could take two years, or it could take someone getting quoted in the New York Times saying the market has hit bottom."
---------------------------

He's more guilty than MacBeth.

The "New York Times" mention is a great "tell" of his knowing guilt.

Why? In the spring/summer of 2005, Bob Toll was the center of a gushing New York Times Magazine feature on the housing boom---and how he said it wouldn't possibly stop, that prices would rise four times further to meet Britain's cost/sqft. Pump pump pump (as he dumped his stock).

Hey, do you know what will signal the bottom?

How about this article in the New York Times??

"FORMER TOLL BROS CEO SENTENCED FOR FRAUD, INSIDER TRADING, VIOLATION OF SARBANES-OXLEY ACT"

Anonymous said...

Does anyone know anything about this company called PropertyShark.com. I just read an article in the New York Times: http://www.nytimes.com/2006/09/10/realestate/keymagazine/910shark.html?ex=1158552000&en=625783ef4bb74858&ei=5070&emc=eta1

Sounds pretty cool but has anyone here used the site? If the market cools off there may be some real opportunities in the distressed properties indistry. Any thoughts?

Anonymous said...

"Since the economy has been succeeding on the shoulders of the housing boom, why hasn't the stock market reflected its pullback?"

++++Excellent question. I've been wondering this myself. Perhaps the fact that hedge fund trades make up from 30 to 50% of trading volume every day is influencing the stock market more than we know?

Anonymous said...

HEY LOSERS CHECK OUT THE HOME BUILDERS STOCKS, THEY'RE UP 5%+ TODAY!

Big deal...probably insiders trying to keep their boat afloat, dont realize the bottom already has fallen out!

Anonymous said...

Anonymous wrote:
++++Excellent question. I've been wondering this myself. Perhaps the fact that hedge fund trades make up from 30 to 50% of trading volume every day is influencing the stock market more than we know?
-------------------------
I found this article on Marketwatch weeks ago and it makes sense. Could it be possible?:
Harry Schultz's ... offers this acid assessment of the recent rally: "There is a paradox in market prices as I write. We have gold, U.S. dollar, oil and most stock market indexes all showing a readiness to move up. It is an illogical combo. It may be a temporary fluke or it may be there's manipulation of the indexes going on."
Schultz, never afraid of a radical idea, takes manipulation seriously. He says: "It is fairly easy to manipulate stock indexes via just three or four blue chips, and the multinationals appear in several indexes. We've seen it before. Most stock markets were in virtual free fall and suddenly reversed into reverse head-and-shoulders buy patterns. This is a rarity. The U.S. dollar index may also be subject to manipulation."
http://tinyurl.com/zrls9

Anonymous said...

How hot would you say the FSBO market is right now?

Anonymous said...

Yellen repeats Fed bias towards rate hikes

San Francisco Fed President Yellen echoed her previous statement that core inflation is above her comfort zone.

"The bottom line is this: With inflation too high, policy must have a bias toward further firming," Yellen said in a speech to the Emeryville Chamber of Commerce.

Yellen's remarks largely repeated her speech made in Boise, Idaho, on Sept. 7. Yellen said core inflation continues to run above her comfort zone but should move down over time, with a little help from central bank actions and slower economic growth.

"The current stance of policy will move inflation gradually back to the comfort zone while giving due consideration to the risks of economic activity," said Yellen, a voting member of the Federal Open Market Committee this year.

Yellen's "comfort zone" on inflation, one that she considers "an appropriate long-run inflation objective for the Fed," is 1 percent to 2 percent on the core personal consumption expenditures, or PCE, price index. That measure ran at 2.4 percent in the year through July.

http://money.cnn.com/2006/09/12/
news/economy/yellen_bias.reut/
index.htm?postversion=2006091216

Sounds like she is trying to strengthen the dollar, but the
Market knows she doesn't have
enough pull. Once dollar begin to fall fast long term rate will go up as bond investor pull out of the US bond market.

Helicopter Ben is to scare to
raise rate at this time.

So the gap between treasury and MBS yield is going to get tighter.

Lending standards are going to get higher because Lenders' profits are going to get squeeze.

Interested in Hedge Funds watch this
video.

http://www.businessjive.com/nss/
darkside.html

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