And anything else on your mind...
Post links for consideration, don't swear, don't post full articles, add to the conversation, have a good chat...
January 21, 2007
BUBBLETALK - Open thread to talk about the housing collapse
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205 comments:
1 – 200 of 205 Newer› Newest»I bought a 1975 "Bubbas Dream" singlewide trailer fer 12 hunderd dollars in 1990 an it aint depreciated none. I aint worried bout no housing crash.
But the tax man gots me mighty worried tho.
http://buckandmabelsbigadventure.blogspot.com/2006/12/benifits-of-singlewide-trailers-wen.html
Isn't it just a bit too quiet? Crashes happen when everyone is complacent
Bubbles are for bathtubs!
I just thought of that. Pretty clever hugh?
Bubbles / Bathtubs - that reminds me...
How dumb is this girl looking now?
http://tinyurl.com/ydjfbp
Is the Real Estate Market in Bubble Trouble?
By Kendra Todd
September 26, 2006
You can't go anywhere without hearing people talk about "the real estate bubble." Such talk drives me to distraction, and I'll tell you why. It's because there is no real estate bubble. Bubbles are for bathtubs.
Despite a thousand articles in Sunday newspaper real estate sections, the bubble is a myth. The real estate markets in many areas are going through a normal correction cycle. I'm going to tell you how to recognize the signs of a correction in your market, how you can avoid getting sucked into "bubble trouble" and how you can even benefit from the current environment.
i'd get in a bubble bath with her mmmm hmmmm
I'm trying hard to see it, but I just don't see a housing collapse. I don't live in Las Vegas, Phoenix, OC or Florida so I'll take your word for massive inventory increases in those areas. But in my area and the towns I follow, inventory is VERY low and it declined November and December. More worrisome for a buyer (me), it is NOT increasing now, though even in normal markets, it should be. And if all kinds of sellers were waiting for the Spring Market, in these towns, traditionally they'd be listing now. IT'S NOT HAPPENING!
If inventory doesn't increase dramatically and people keep their jobs, prices will not be under pressure to decline - they'll be under pressure to increase! And if so, a collapse isn't going to happen where I live - or in any of the towns I'm hoping to live. I grant you, the frenzy of 2005 isn't here anymore, but it hasn't turned any market I follow into a crash - In fact, it's only soft when compared to 2005...
With the stock market continuing to show strength and liquidity sloshing around trying to find a home, I'm afraid waiting for a crash will prove very unsound advice for anyone in a town that didn't have the land available for these brand new McMansion ghettos (I mean subdivisions) or condos.
I'd like to see less focus on the specialized areas where builders and speculators have run amok. These areas typically are poor commute areas and the same thing's being said over and over about the trouble they're in - we get it. What about areas where building was constrained due to long term demand and desirability? I'm talking about the traditionally desirable commute areas around desirable job centers.
There's an article in the NY Times today, "Property Values in New York Show Vibrancy" that illustrates no collapse. I don't think this is inaccurate nor unique. To simply keep talking about speculator flippers and builders in trouble might be to ignore the housing market at large. Housing Panic risks becoming merely an opposite bookend to the NAR cheerleaders cherry-picking data for its message.
Sorry to be harsh, but this subject is too important and this web site is too great an opportunity to squander.
Everyone who hasn't bought a house or condo has been priced out forever, so don't even bother trying to buy one now.
I have no idea why the homebuilders keep building houses, because bitter renters have been priced out forever.
Who can explain this?:
January 12, 2007
New York City Property Values Jump 19 Percent
By SEWELL CHAN
Defying fears of a cooling real estate market, the total value of all New York City property jumped 19 percent, to $802.4 billion this year from $674.1 billion last year, officials announced today. The increases were greatest in Brooklyn and the Bronx and among apartment buildings and commercial properties.
The surging value of city properties — across all five boroughs and all four property classes — was the most striking aspect of the tentative property assessment roll that the City Department of Finance released this afternoon for the fiscal year that begins on July 1.
Assuming that Mayor Michael R. Bloomberg and the City Council do not change tax rates — which is practically a certainty since the city’s short-term financial outlook is strong — the average tax bill on one-, two- and three-family homes will rise 4.5 percent, to $3,236 from $3,098.
The average tax bills will rise 2.1 percent for condominium owners, to $6,587 from $6,449, and 6.6 percent for owners of cooperative apartments, to $4,214 from $3,952.
On Monday, the city will begin mailing property value notices to the owners of the city’s 980,911 taxable properties. Owners of small houses who wish to challenge their assessments must do so by March 15; other property owners have until March 1. The final property assessment roll will be published on May 25, and bills will start going out on July 1.
Not sure if you've been able to see the new website called the Implode O Meter of lenders.
http://mortgageimplode.com/
Funny site. Two lenders are already knocked out and there is gossip about another one biting the dust. Stay tuned...
Dr. Housing Bubble
Many factors contributed to the boom -- low interest rates, a strong economy, creative financing alternatives, a swelling boomer population with lots of wealth transferred from aging parents, and the media itself. But the presence of speculators best defined the boom.
Who are the speculators? The real estate market consists of the following categories of buyer:
Non-discretionary Buyers - These folks need to buy because of a required move, brought on by an event such as a job change, a health issue, or a sudden financial change. In any market there will be non-discretionary buyers.
Discretionary Buyers - They are the people purchasing second homes, retirement homes, or are up-sizing or down-sizing because of changing financial or family situations. They can sit on the sideline if the market is uncertain.
Investors - Investors buy property for its underlying value. They do their homework. They want to know if the rent will cover the carrying cost. What is the historical trend in the local market? What is the expected return on investment? They have a plan for the use and disposition of their purchase. They can be found in all cycles of the market.
Speculators - "Speculators are otherwise rational people who somehow morph into someone who will buy a property for $100,000 more than the seller paid a few months ago on the assumption that the person in line behind them will do the same." says Tobin. Speculators must dress, walk, or smell differently because they always seem to find each other at cocktail parties. Here, fortified with media hype, they brag and feed each other anecdotal evidence of their shared theory of a perpetually rising market. Once bulked up and re-energized, they're off to proselytize to others.
Currently, the market is in a correction period. Yesterday's speculative buyers are today's sellers. The discretionary buyer is on the sidelines.
http://www.prweb.com/
releases/2007/1/
prweb496579.htm
Here is your protest, Keith.
iw
By April Simpson, Globe Staff | January 12, 2007
In 30-degree weather, nearly 200 protesters packed the corner of Tremont and Park streets in downtown Boston yesterday evening in an "emergency rally" to stop President Bush from sending more than 20,000 additional troops to Iraq.
The Boston Common rally was inspired by Bush's nationally televised address Wednesday night, when he announced that more troops would be sent to work alongside Iraqi units. It was one of hundreds nationwide organized by activist groups, including MoveOn.org .
Some protesters said they were not surprised Bush wants to send more troops, despite low public approval of the war and the bipartisan Baker Commission's recommendation to withdraw military personnel from a country wracked by civil strife.
"More than 3,000 US soldiers are dead, and the total death is over 18,000," said Dylan Seo , 24, an activist with Socialist Alternatives and Stop the Wars Coalition . "It's ridiculous that all this time and money and energy is being spent."
Protesters hoisted signs bearing such messages as "War is terrorism with a bigger budget" and "Kill one person and it's murder, kill thousands and it's foreign policy." Speakers took turns at a microphone addressing the protesters, many of them seemingly middle age. Calls to "impeach Bush" roused applause.
Boston.com
A federal judge sentenced Lawrence Randall Benham Friday to a little more than eight years in prison in connection with his guilty plea to wire fraud and mail fraud.
U.S. District Judge Ewing Werlein Jr. also ordered Benham, 42, to pay restitution of $412,800.
Prosecutors said Benham found homes for sale and then used the credit and identifying information of so-called "straw buyers" on loan applications and also exaggerated the buyers' incomes. He then arranged for the straw buyer to buy the home at an inflated price, prosecutors said.
The indictment alleged that Benham, who owned Benham Investment Group, Paradigm Properties and Builder Funding Service, was able to take out more than $8.9 million in loans in other people's names.
http://www.chron.com/disp/
story.mpl/business/
4467900.html
An accountant who allegedly prepared false documents for a mortgage fraud scheme that ensnared a Kansas City mayoral candidate was ordered jailed Friday.
James E. Coleman had been free awaiting sentencing in an earlier fraud case. In the new case, he allegedly prepared a number of bogus letters attesting to the credit of a couple preparing to purchase a home owned by former Jackson County Executive Katheryn Shields.
http://www.kansascity.com/
mld/kansascity/news/local/
16450340.htm
Man pleads guilty in mortgage scam
A Tucson man pleaded guilty to conspiracy to commit wire fraud and engaging in illegal monetary transactions Wednesday in what prosecutors described as a $13 million mortgage fraud scheme. Carlos Bent, 35, faces up to five years in prison when he is sentenced on March 26 before U.S. District Court Judge Raner Collins.
http://www.azstarnet.com/
allheadlines/164419
HomeGold ex-CEO to fight fewer charges
Johnson threw out one charge of perjury against the former chief executive of the subprime mortgage lender, and said he will decide the fate of the seven other fraud charges later.
Sheppard now faces a maximum of 25 years in prison — less than half of the 57 years that had been the potential — and fines of about $100,000.
The 2003 bankruptcy of Lexington-based HomeGold and its subsidiary Carolina Investors is the biggest in state history. When the companies failed, more than 8,000 investors lost more than $277 million.
http://www.thestate.com/
mld/thestate/16449929.htm
``Secret Seconds'' On Top of ``Piggyback'' Mortgages May Trigger Homeowner Foreclosures of $164 Billion!
Professor Rydstrom, Esq. says: "Creative or exotic loans are not the problem per se, nor are they so "exotic". What's exotic is the infusion of what I call "RAhD" (randomly activated hidden debt) by the industry and government sponsored entities (GSEs) such as Fannie Mae and Freddie Mac. Reportedly, uninsured first liens with undisclosed second liens were sold to the GSEs. RAhD took down Enron and the dotcom boom. It can also ruin homeowners.
With the recent rapid growth of homeownership, lenders created loans such as Piggybacks (etc.) to meet demand. Lender's earned more fees by using first and second lien piggybacks pursuant to GSE guidelines; which allowed the sale of first liens up to 80% of value within limits (without insurance). What's worrisome is the high loan to value and adjustable rate piggyback first liens burdened with super-high revolving variable rate home equity line of credit seconds ("HELOC") (Calhoun, PhD) topped off with abusive prepayment penalties, running naked without mortgage insurance.
When distressed prepayments are added to foreclosure rates, total "failure rate" for subprime approaches 25 percent.
http://www.quote.com/qc/news/story.aspx?symbols=BWIRE:100&story=200701121022_BWR_87922691
I'm an investor. At one point I owned 5 homes. Sold 3 of them. I still have 2 which I am renting. My tenants for one of them had a death in the family and are moving out of state.
I put an ad up on craigslist and in the paper which started running today. It is 11:15am and have had 3 calls already and have an appointment at 1:30 to show it. I am asking $2400 a month. My total carrying cost is $2250 a month for everything including landscaping costs.
I sure am fucked.
Pennsylvania's 3,000 mortgage lenders and brokers are being put on formal notice of new state Banking Department guidelines for "acceptable" conduct.
Acting Banking Secretary Victoria A. Reider outlined the new policy in a letter Friday to mortgage companies.
The guidelines — published Dec. 16 in the Pennsylvania Bulletin — offer examples and definitions of practices considered dishonest, fraudulent, illegal, unfair, unethical, negligent or incompetent.
http://www.poconorecord.com
/apps/pbcs.dll/article?
AID=/20070113/NEWS/
701130372
Well, here we are 1yr. later, speculating on the housing market. Some markets up some down. Gold up gold down. Stock market up, stock market down. The sky is falling! Another year, another panic in a rather healthy economy (unemployment @ 4.8)!
Get on with your lives!
Nothing getting solved here!
"Anonymous said...
Well, here we are 1yr. later, speculating on the housing market. Some markets up some down. Gold up gold down. Stock market up, stock market down. The sky is falling! Another year, another panic in a rather healthy economy (unemployment @ 4.8)!
Get on with your lives!
Nothing getting solved here!"
It's a far cry from Real Estate always goes up!! Nothing may be getting solved here.
There is a lot of good information, that shows the ugly side of the rosy picture the RE Industry tries to paint.
Have you looked at the price of oil and copper lately??
With Prop 13 why are there 259,510 tax liens in California?
http://www.foreclosure.com/
A tax lien is a lien imposed on property by law to secure payment of taxes. Tax liens may be imposed for delinquent taxes owed on real property or personal property), or as a result of failure to pay income taxes or other taxes
http://en.wikipedia.org/wiki/Tax_lien
actually unemployment is 4.5% not 4.8%
Keith - you need to have a separate post about the Amazing Shrinking Buyer Pool.
When the thousands of foreclosures hit this year, it will increase the inventory of homes for sale AND decrease the pool of qualified buyers. With a foreclosure on their credit score, the FB's won't be able to qualify for a new home loan.
I'm making money, my friends are making money, even the jerk across the way is making money. House prices are rising here in New York City. How much longer should i wait
Hey Keith-
How about a post or sidebar on the escalating implosion of the subprime mortgage market?
They've been blowing up at an increasing rate the past couple weeks stateside.
I believe we've hit 6 or 7 now in just the past month?
Anonymous Realtroll,
Prove that you own those properties. Give us the addresses so we can look them up on Zillow/Realtytrac and see what you paid and what the rentals are going for in that area. Otherwise, I call your post bullshit.
Unless prices come down in housing,and I mean down a lot the next generation will go to mexico to work
For everyone who's amazed that housing prices go up when inventory goes up - it's very simple, and has been observed in every single market that's gone 'pop'....
As prices stop going up by 10/15% per year, those sellers in the upper-middle to middle price range continue to tack on that 10 to 15% appreciation. But then find they are unable to sell at that price...so inventory goes up.
Meanwhile, the rich continue to buy their houses. For them, there really is no change in business as they don't have to worry about a baseline income/ security.
This means that the number of houses sold goes down, while the % of those houses that are higher priced continues to go up.
This then leads to newspapers/ realtors, etc, being befuddled at inventory going up - but prices going down in defiance of Adam Smith's canard.
"Anonymous said...
I'm trying hard to see it, but I just don't see a housing collapse.
.....the same thing's being said over and over about the trouble they're in - we get it. What about areas where building was constrained due to long term demand and desirability?
...... To simply keep talking about speculator flippers and builders in trouble might be to ignore the housing market at large. Housing Panic risks becoming merely an opposite bookend to the NAR cheerleaders cherry-picking data for its message.
That was a great, well thought out post. I also would like to see more coverage about the bubble affect on "none bubble" America, like where I live.
Even with the influx of dimwit, but overpaid, execs and lobbyists from the Balt/DC area
there is no mad rush to increase inventory here. The only new development we have had here since the sixties is building strictly on a confirmed/signed contract basis.
It has maybe a house on every 4 to 6 lots, with nobody living in them so far that I can tell. Some even have "For Rent" signs in the windows!
O.K. Phoenix, LA, Las Vegas, Mass, are 'correcting' big time. What about everywhere else. I have no doubt that the Big Pop will ripple out to here in the middle of nowhere. But how, why, and when is important to me and a lot of "non bubble" residents.
Keep it pithy.
The main issues are affordability and supply demand.
The West Coast, East Coast, and parts of the Midwest are unaffordable to most people these days unless they get a toxic loan. Sure, anyone can "buy" a house with a liar's loan. The question is how long before they are forced to sell or foreclose when the ARM resets? The foreclosures are trending up across most of the nation. Foreclosures and endless building of houses and condos will add to the supply, while the fleeing speculators will decrease demand.
People who bought pre-bubble will be fine absent layoffs or medical problems. Many people who bought from 2004-2006 in the bubble areas with toxic loans are doomed. Any speculators who were too dumb to see the peak in late 2005 will be burned too.
I'd like to see the speculators burned first. Next should be the lenders. Third should be the lying realtors who were pumping like the stock ANALysts did during the dotcom bubble.
unemployment @ 4.5 not 4.8%?
Thanks for pleading my case!
Local home for sale in San Diego's North county, 3800sq. .32 ac. August '06 $975k
Did Not Move!
Today, same home $1.2mil
I think we're still in denial here!
Guidelines put mortgage lenders, brokers on notice guidelines
David Pierce
Pocono Record Writer
January 13, 2007
HARRISBURG — Pennsylvania's 3,000 mortgage lenders and brokers are being put on formal notice of new state Banking Department guidelines for "acceptable" conduct.
Acting Banking Secretary Victoria A. Reider outlined the new policy in a letter Friday to mortgage companies.
The guidelines — published Dec. 16 in the Pennsylvania Bulletin — offer examples and definitions of practices considered dishonest, fraudulent, illegal, unfair, unethical, negligent or incompetent.
The warning comes on the heels on a national study released last month on subprime mortgages that predicts 2.2 million households have or will lose their homes to foreclosure.
It also comes after word that Monroe County's foreclosure rate last year topped 800 filings for the first time since 2003, when the Banking Department commissioned a study on Monroe's record-high foreclosures.
"This policy will help ensure that homebuyers receive the highest level of service when they're making these important decisions that will impact their financial futures," Reider said.
Subprime loans carry higher interest rates and less favorable terms than traditional mortgages but are often used by borrowers who can't qualify for lower interest loans.
Many subprime loans, said to account for nearly a quarter of all home loans, have sudden large jumps in interest rates that take effect a couple years after the loan is issued.
Some also have pre-payment penalties that prevent borrowers from refinancing into a new loan without incurring costs that make it impossible to realize a savings.
Reider warns that companies that fail to conform to the new guidelines could face suspension, revocation or non-renewal of their licenses.
Several changes were recommended in a 2005 Banking Department report to the General Assembly on statewide mortgage foreclosures, conducted following release of its Monroe County study. The statewide report makes recommendations to curb abusive lending practices.
But the department and other state agencies aren't doing nearly enough to stop abusive home sale practices, says one local homeowner activist.
"Gov. Rendell's office should take immediate action to investigate and find remedies to protect homeowners who have continued to be victimized by the criminal element that consistently perpetrates fraudulent practices involving innocent homeowners throughout Monroe County and Pennsylvania," Pocono Homeowners Defense Association President Al Wilson said in a press release.
Wilson contends the home sale abuses will continue until county and state law enforcement officials prosecute the perpetrators and put them in jail.
Wilson also called on Rendell to meet the request of the Pennsylvania Homeowners Defense Association — a home buyer consumer counseling agency — for funding to continue its efforts.
Homeowners or potential buyers seeking consumer information can make an appointment with the group by calling 570 424-1088.
The Poconos Homeowners Defense Association — an advocacy organization not affiliated with the Pennsylvania Homeowners counseling agency — has scheduled a meeting for Saturday, Jan. 20, 5 p.m., at the public library in Brodheadsville. For information about this event, call 570 643-0958.
http://www.poconorecord.com/apps/pbcs.dll/article?AID=/20070113/NEWS/701130372
Another One Gone !
http://tinyurl.com/yl2u6o
---------------------------
Clear Choice Announces Insolvency and Restructuring of Operations
TEMPE, Ariz., Jan. 12, 2007 (PRIME NEWSWIRE) (PRIMEZONE) -- Clear Choice Financial, Inc. ("Clear Choice") (OTCBB:CLRC), a Nevada corporation, announced that it is insolvent and in default on numerous obligations. Clear Choice has officially closed the mortgage lending offices of its wholly owned subsidiary, Bay Capital, located in Owings Mills, Maryland and Irvine, California. Out of an original workforce of over 150 people, 120 have been released. The Company is in default of its lease of its corporate headquarters located in Tempe, Arizona and has been locked out of its facility and is in default of a note with its former CEO and major shareholder Stephen G. Luke, and is in default of a note due to the two former owners of Bay Capital, Inc. Its operating company, Bay Capital, has been forced to shut down various warehouse lines.
-----------------------
That's the second publicly quoted mortgage company that's gone out of biz..So far both of them are OTC and I don't touch those, long or short.. but the NEW, LEND, IndyMacs, Downeys of this world and on and on have to be somewhere in this lengthening queue towards insolvency - or sharp losses at the very least.
There are pointers to calculations of MBS "failures" that can help in assessing the timing of these things at wallstreetexaminer.com
Not that it helped in THIS particular case :-)
-K
A HUGE CROSS SECTION OF THE AMERICAN PEOPLE ARE OVERWHELMINGLY STUPID..
I WANT TO CAPITALIZE ON THEIR STUPIDITY...
PLEASE LIST INDUSTRIES THAT REAP HUGE PROFITS/DIVIDENDS ON AMERICAN IGNORANCE...
“Spending binges brought on by cheap goods flooding the country and by the overconfidence of owning a suddenly pricey house have sent personal savings rates plummeting, he said. For the first time in 2005, Americans bought more than what they earned.”
“If consumers start saving slowly, 2007 should be a weak year, Thornberg said. But if they start saving dramatically, 2007 could turn into a recession when the money stops circulating, he said. ‘There’s all sorts of nasty scenarios out there,’ he said.”
..........
“In the months ahead, the economist said, ‘construction spending and home prices are what we have to watch for.’ Those variables are particularly important because of their ‘multiplier effect,’ Adibi said, as they not only create jobs but spur consumer spending on items like furniture, appliances and other home fixtures.”
"PLEASE LIST INDUSTRIES THAT REAP HUGE PROFITS/DIVIDENDS ON AMERICAN IGNORANCE... "
==============================
better get into politics!!!
ON THE HOUSE: Bidding low for homes is a bad strategy
By Rita Glastris
Friday, January 12, 2007 4:48 PM CST
Sarah wants to buy a house. Throwing money away on apartment rent has gone far enough. It's doing nothing to help her build a nest egg for her future.
Counting the three she wrote before the holidays and the two this month, Sarah has submitted a purchase offer on five different houses. Her actions are cutting a wide swath, leaving behind a trail of disappointed and irritated sellers.
Here is what Sarah has been doing.
Before even starting to look at houses, Sarah's real estate agent insisted she obtain a pre-approval letter from a reputable lender. That's a must move in today's market.
Sarah is a single person rapidly climbing the corporate ladder. With her good credit and substantial salary, the lender told her she could afford a house up to $250,000.
But Sarah insists on only looking at houses in the $300,000 to $325,000 range, which is $50,000 to $75,000 more than she can afford. Her rationale is this. It's a flat housing market. Sellers are anxious, and houses always are priced much higher than sellers expect to get for them. So she is submitting purchase offers of $250,000, insultingly below asking prices, convinced sellers will welcome them gladly.
Sarah's thinking is totally off the wall.
The reality is this. Though the housing market has leveled in the metropolitan area, it is far from flat. Things are not selling at the frantic pace they had been in previous years. Rather, there has been a return to reason. But buyers still are out there. And prices are remaining steady.
In addition, the days of overpricing houses when listing them are long, long gone. Thanks to computers, a wealth of information is at one's fingertips showing comparable houses recently sold and currently on the market. With knowledge so readily available, it would be folly for a seller to think he could command more or a buyer would be willing to pay more than the market indicated.
Sarah can continue submitting one offer after another, but her chance of buying a house at a sale price grossly below the asking price is minute. She would have better odds at a rigged crap table. So would you if you are in the market for a house and thinking like Sarah.
==================================
Methinks the author drank too much 125+% financing, stated income, no money down kool aid and thinks such a lending atmosphere is the norm. Nope. PS GO SARAH!!!!
Anonymous Realtroll,
Prove that you own those properties. Give us the addresses so we can look them up on Zillow/Realtytrac and see what you paid and what the rentals are going for in that area. Otherwise, I call your post bullshit.
As soon as you provide this blog (and the world) with your name, address and phone number I will do likewise.
Dipshit.
I think Sarah will waste a lot of her weekends.
anony at 4:15 -
I wholeheartedly agree. Go Sarah!
The buyer can offer whatever s/he wants, and the seller is free to refuse the offer or counteroffer.
It reads like an article designed to squeeze a few more dollars out before the bubble pops. Heh.
Keep lowballing those bastards. Existing home prices are dropping due to the tsunami of new homes that are being built.
Don't throw $100,000 away on an overpriced home. Why pay $300,000 for a home that is worth only $200,000?
Don't worry about rates going up. You can always refi when they come back down. However, you won't ever be able to go back and change the original purchase price if you overpaid.
The best strategy is to let the rates go up, which will push prices down. That is when you should buy. Eventually there will be a recession and rates will come back down. You then refi into a lower rate on top of the great price you got on your house.
watch this video-ads of NAR today !!!
http://www.paperdinero.com/BNN.aspx?id=80
"People who bought pre-bubble will be fine absent layoffs or medical problems."
You forgot to figure in the property taxes to support the county/state workers and teachers unions (your un-official union dues, you pay, but you are not a member, and get NO benefits).
As the foreclosures mount, houses sell for less, some remain vacant, tax revenues are way down, the people that own their places outright are still screwed, regardless of whether they are "pre bubble" or not!
The political 'pigs-at-the-trough' are not about to let their masters take any form of hit! The pigs know WHO writes out those nice, fat, reelection campaign checks!
The taxes on those left standing will just be doubled, tripled, whatever!
You could argue that even members of the political arena and state/teacher’s union members pay taxes like everybody else. BUT, they have guaranteed salary and pensions, and yearly increases in both FOREVER! The poor slob that lives and works in the real world DOES NOT.
The only satisfaction the little guy has is that when the taxing parasites have finally taken away EVERYBODIES houses outside of their well paid click for failure to pay, they will have only themselves left to tax!
I read an article in a recent state retirement publication that stated the 55-60% of the state/county workers and teachers will retire in the next 5-10 years here in Taxsylvania. The article went on to state that 72% (some king of government figure) of these have already purchased second (retirement?) homes outside the state!
In other words, the majority will be sucking down those nice fat pensions off of the already suffering taxpayer’s back, and won’t even be spending it here in PA. to support the system in any way. The article predicted a massive hemorrhage of people out of the state, and I'm thinking an even more massive addition to the housing market as retirees attempt to sell, pushing sales down!
Should prove interesting.
As this thing slowly unfolds, it’s going to be nasty for everybody!
Prices are down 3% nationally. Sarah is lowballing by 40% and expects to buy a house. Ohhhh kaayyyy
Don't worry about rates going up. You can always refi when they come back down. However, you won't ever be able to go back and change the original purchase price if you overpaid.
Right and fefis are completely free of charge. And rates will come down for sure.
phoenix:
01/01: 48,213
01/03: 48,621
01/05: 49,348
01/06: 49,614
01/09: 49,954
01/10: 50,152
01/14: 51,072
"You then refi into a lower rate on top of the great price you got on your house."
Bingo, and then use the cash, from the refi, to start a business instead of wasting it on home furnishings and other junk.
What no one's talking about is what will happen after the sub-prime lenders have left the marketplace? Without them, banks won't be forced to lower their lending standards to compete. Further, the sub-primes will have left the marketplace so they won't have to buy back the bad mortgages they've written. The banks are going to be stuck with their mortgages. Foreclosures are going to hit asset prices forcing writeoffs. The banks will have to recapitalize their books, and in so doing will require down payments and proof of income. People won't be able to get approved for the large amounts they have been the past few years. Resale prices will 'revert to the mean', which is going to cause great harm to the economy. A credit bubble is only good on the front side. After the party cometh the hangover.
“Mortgage Lenders Network said ‘human error’ caused it to lend $600 million at below-market rates, fueling losses that led to the closure of its biggest unit.”
“‘The economics of the market went upside-down,’ Heffernan said. ‘We could continue to go down the path of funding loans at a loss or we could exit the market completely.’ The company furloughed about 900 of its 1,800 employees for two weeks.”
================================
Human error, or greed?
The values jumping in N.Y. might be explained, by, uh, the huge f'ing bonuses that Wall Street gave it's employess? For example, Goldman Sachs gave out an average 622,000 bonus to each employee.
Holy Toledo! If that doesn't create a boom town feel, I don't know what will.
Unfortunately, only New York can properties are going to benefit from this because those Wall Streeters have to live near their work.
I've been seeing these ads on Television. "All the money you need. Just on your signature".
It's insane. There is so much cash flying around they are going to almost have to give it away.
It's going to lead to massive inflation which might mitigate some of the bubble but that mitigation will only happen if peoples' incomes rise to be able to pay their mortgages, even after they reset.
Also saw this:
http://tinyurl.com/y2dt43
It means that other currencies that have a higher interest rate have better investment bonds. It means there will be pressure on the Federal Reserve to raise interest rates or risk the dollar losing demand (value).
We are teetering on the edge folks. It took a century to build up American hegemony but it's only taking our government 5 years to destroy it.
Economists upgrade US outlook after surprisingly strong data
Jan 14 6:02 PM US/Eastern
Economists are hastily upgrading their forecasts for the US economy after a series of surprisingly strong reports suggesting the so-called "soft landing" may be over and growth is accelerating.
Over the past week, surprises have come in stronger-than-expected reports on US job creation, the trade balance and retail sales -- all key contributors to economic activity.
Lehman Brothers chief US economist Ethan Harris on Friday boosted his forecast for fourth quarter 2006 growth to an annualized rate of 3.3 percent, a leap from the firm's prior call for just 2.0 percent growth.
"After slowing in November, the economy seems to have regained its stride," Harris said.
"With the last of the major data in, we are now revising fourth quarter GDP to an above-trend 3.3 percent. A wide range of indicators have been stronger than expected. Most important have been the strong consumption data and the surprising improvement in the trade balance."
The latest data defy predictions that the slump in real estate would filter into other areas of the economy, notably consumer spending.
The latest data showed US employers added a healthy 167,000 new jobs in December, with unemployment holding at a low 4.5 percent. Average wages were up 4.2 percent annually.
A separate report Friday showed US retail sales increased 0.9 percent in December.
Retail sales are closely watched as consumer spending accounts for about two-thirds of US economic activity. Some analysts have theorized that slumping housing prices may crimp spending in a reversal of the so-called wealth effect.
The higher retail sales "will juice up overall real growth in the fourth quarter to about 3.0 percent -- a substantial improvement from only 2.0 percent in the third quarter" said Brian Bethune at research firm Global Insight.
Even the US trade deficit, long a source of weakness, improved in the latest report to 58.2 billion dollars in November, as exports increased.
The data have eased pressure on the dollar and lifted the stock market to fresh highs.
The downside of the data is that it means the Federal Reserve is unlikely to cut interest rates soon. And some say the Fed, which has been warning about inflation, could maintain its bias toward rate hikes or even increase rates at some point in 2007.
But some analysts say the strong data may be distorted by mild weather and drops in energy costs.
"Some of this strength, however, should prove illusory," said Wachovia Securities economists in a research note.
"Housing and motor vehicle production are still major drags on output, with residential construction expected to slice another percentage point off fourth quarter growth and declines in motor vehicle output slicing off another percentage point."
Wachovia expects GDP growth "to slow to around a two percent pace in 2007 and look for a string of seven consecutive quarters of GDP growth below three percent," the report said.
"Most of this slowing reflects the unraveling of the housing boom, which we believe still has a way to go. Consumer spending will also pack less punch but will post modest gains."
Wachovia said whether the slowdown is enough to allow the Federal Reserve to cut interest rates in 2007 "has become an open question."
"The expansion looks far less precarious than it did even a few weeks ago," the economists said. "Provided economic conditions do not take a decided turn for the worse, a Fed ease will likely require a substantial lessoning of inflationary concerns."
Harris at Lehman Brothers said "a natural question is whether the solid fourth-quarter growth is a fluke."
He said data could be distorted by things such as the introduction of the new Windows Vista operating system, shifts in holiday shopping patterns, problems in the auto sector, the plunge in energy prices and unusually warm winter weather.
"However, looking closely at these factors on net they argue for more, not less strength in the first quarter of 2007," he said.
strong economy = higher rates
also will not help flippers and toxic loan drinkers
"It took a century to build up American hegemony but it's only taking our government 5 years to destroy it. "
We've been going down a slope since the 1960's Vietnam War and Great Welfare Society.
lose our "invincibility" in the vietnam war
waste trillions on lifetime guarantee of welfare and destroy our cities with housing projects
the dollar/gold link is broken
stagflation 1970's
run up deficits in 1980's
dotcom/tech bubble 1990's
housing bubble post 2000
iraq debacle
New homes are being priced lower than resales even with all the upgrades. Ain't that a kick in the nutsack of all those FB's the past 3 years!!!
I just love it
It IS very gratifying to see prices finally coming down after all these years!
Phew! That was one heck of a bubble.
"We've been going down a slope since the 1960's Vietnam War and Great Welfare Society."
I'd say the destruction of our manufacturing and de-focus on core science R&D has rendered us with no future but a financial/speculative economy like the UK.
The anon post Sunday, January 14, 2007 4:15:25 PM contains the loaded statement of yet another a-hole whom goes around discussing things she doesn't understand: "Throwing money away on apartment rent has gone far enough". When will mental midgets like this discover that "buying" an equivalent rental in today's market, in many places means throwing away 2x rent or more in interest payments? Never. Because people that are still spewing this stupidity are slaptards.
really funny... you guys have probably already seen this.. but if not:
http://www.flippernation.com/default.htm
internet comedy about RE flippers, realtwhores, and mortgage slime...
enjoy.
Renting can be a good idea in some markets where prices are insanely high like the bay area or new york city. However in most of the country renting is a foolish thing to do.
When taking into account the tax break, paydown of principle and just a 1-2% yearly appreciation which has been the average for 100 years, owning is the better bet long term.
Of course short term anything can happen, but unless you like to move every 2-3 years that will not be an issue.
Here's Casey Serin's new website. No comment moderation as of this morning!
http://buyingapartmentbuildings.wordpress.com/
NASDAQ: UP 3.6% YTD
D R HORTON: UP 1.5% YTD
GOLD: DOWN 2.0% YTD
SILVER: DOWN 0.9% YTD
Seeing how Keith and HP has been wrong about everything so far, can I have some more advice please? Betting against everything I read here is making me lots 'o money.
9% Jump in British Prices
KEIF, How do you explain this?
British house price growth advanced from 8.6 per cent in October to 8.9 per cent in November, official government figures show.
Statistics from the Department for Communities and Local Government (DCLG) indicate that the three months to November last year saw house prices grow 8.5 per cent, up from eight per cent in the previous quarter.
Sales of larger properties caused the boost, with bungalows and flats stagnating. Scotland saw a slight decrease while Northern Ireland continued to enjoy a significantly higher rate of increase.
The DCLG's figures confirm continued prosperity for the housing market last autumn, defying the expectations of analysts who predicted that affordability constraints would prompt a slowdown.
A lack of any immediate response to last year's two interest rate rises from the residential property market was a contributing factor to the Bank of England's unexpected quarter point hike this month, Howard Archer of research firm Global Insight has claimed.
"If house prices continue to post sharp rises over the coming months, it will increase the chances of interest rates rising even higher," he commented.
"With many people stretching themselves to the limit to get in, or move up in, the housing market, even a relatively limited cumulative increase in interest rates could ultimately have a significant dampening impact on activity and prices."
Where are the home buyers coming from in 2007? Typical home buyer is a home seller. If one can't sell a home, one can't buy a home. Not enough grads to make a difference and not enough immigrants to make a difference. Only thing that can may a difference is a significant decline in prices. Seems to me.
"Prove that you own those properties. Give us the addresses so we can look them up on Zillow/Realtytrac and see what you paid and what the rentals are going for in that area. Otherwise, I call your post bullshit. "
Zillow is a joke...the value range for any given home is + or - 30%...do you know any lenders that use zillow to underwrite? It will be another pets.com...thats the real bullshit here.
Across the Pond today, here tomorrow ? In a climate of rising interest rates, quite possible.
From the British torygraph:
http://tinyurl.com/yxyt4h
------------------------------
Banks withdraw fixed-rate mortgage offers
By Rosie Murray-West and Faith Archer
Last Updated: 2:10am GMT 16/01/2007
Banks and building societies pulled many fixed-rate mortgage deals off the market yesterday, denying borrowers the chance to avoid the Bank of England's next increase in interest rates.
Critics said lenders were anticipating further rises from the Bank but giving homeowners with big mortgages less chance of protecting themselves.
.....
The withdrawal of fixed-rate deals, which have been championed by Gordon Brown, the Chancellor, began after the Bank raised its rate to 5.25 per cent last week.
About 12 lenders have suspended popular fixed-rate mortgages, with some withdrawing their entire range.
......
----------------------------------
Interestingly, its not just 25 year fixed (UK standard) that's disappearing. Many of the first year, first 3, first 5 year fixed have also been withdrawn.
Get your FIXED APR mortgages in now..
-K
"ON THE HOUSE: Bidding low for homes is a bad strategy"
If you lowball, the terrorists win!
"By Rita Glastris
Friday, January 12, 2007 4:48 PM CST
Sarah wants to buy a house. Throwing money away on apartment rent has gone far enough. It's doing nothing to help her build a nest egg for her future."
Yes, because as well all know, you get nothing for paying rent. The landlord takes your money and then makes you sleep out on the sidewalk. Meanwhile, paying $2 or $3 in interest to the bank for every dollar you actually put toward equity is a genius savings plan. No wonder the bank is so anxious to let you in on this steal. Up until now, the virtue of this arrangement is that it prevented the typical J6P moron from blowing all his savings on useless crap until he sold his house at retirement. Thank God we got HELOCs to take care of that.
The screeching of the bulls is a lot louder now than it was even in 2005. Of course, Goebbels was broadcasting doom to the Allies a few hours before he blew his brains out, and the Taliban were screeching for a "global jihad" against America shortly before Kandahar fell. All such people howl the loudest before the end.
"Prices are down 3% nationally."
Ridiculous. Housing prices never go down locally, let alone nationally. After all, the bulls told us so often enough.
"Unfortunately, only New York can properties are going to benefit from this because those Wall Streeters have to live near their work."
But, but, you don't understand. The fact that NYC held up thanks to the biggest handout in the history of the world means that the housing bust is over everywhere. Goldman Sachs employees will save FL, CA, AZ, NV, etc etc and those doom and gloom bears will be wrong again.
'Economists are hastily upgrading their forecasts for the US economy after a series of surprisingly strong reports suggesting the so-called "soft landing" may be over and growth is accelerating.'
Hilarious. I guess the "soft landing" lie wasn't bold enough for them, so now we're gonna pretend it's right back to 1999. Well, like Goebbels taught, if you're gonna lie you'd better tell the biggest lie you can.
Meanwhile, despite the scorching runaway growth, you can count on the inflation numbers this week to be jaw-droppingly low. After all, the government has NO motive (COLA, TIPS, I-bonds, gold prices) to distort them, right? Right, comrade?
Bill Fleckenstein, on MSN Money, has a great column up. "Home-loan house of cards ready to fall", offers insight from a former top executive at a sub-prime lender. If you need to get your schadenfraude fix, this is it!
Bill Gross timing was off with US Treaury could his timing be off with mortgage backed securities also?
Gross and a growing number of investors are reducing Treasury bonds in favor of mortgage-backed securities as expectations for lower interest rates this year fade.
http://www.bloomberg.com/
apps/news?pid=20602007&sid=
aNBK7pryh9WM&refer=rates
Another Realtwhore in Phoenix!!
Is Anybody Out There ?
--------------------------------------------------------------------------------
Reply to: pers-263361702@craigslist.org
Date: 2007-01-15, 11:10PM MST
Honestly, It makes me a tad bit nervous to put myself out here in front of the Random internet audience. But I figure: Ya Only Live Once, right? Semi newbie here-please take it easy on me! Well, you run across all kinds of crazy stuff out here dontcha? Lol Ive been surfing the posts for awhile and just HAD to throw one up! :-)) If nothing else, these bulletin boards provide great entertainment don’t they? There are a ton of posts out here! :-)) LMAO, I don't normally surf the 'girls for guys' section, but I ran across the best and funniest CL post EVER... Its from a gal (definitely a HOTTIE) who does mortgages and plays with her clients! I thought to myself since I am a broker Id throw my own post up just to see what happens! Now, understand Im not gonna sit here and say I'll fuck anyone etc etc...but I have posted my pic below (yes, its really me) to let you at least have some eye candy~ And definitely get back to me if you need help with a refinance- if you need to lower your mortgage payments, cash out some equity, or consolidate some higher interest debt, leave me a name and contact number and we'll take it from there. Love and Laughs, Traci M. P.S. My contact number at work is: two / zero / six / seven / seven / four / nine / eight / two / one . I originate loans in all 50 states, purchases, refi's, and equity lines of credit. Definitely get in touch with your name and contact number and I'll be SURE to get back to you ASAP !
G'day mates!
It must be official now--Your New York Times proclaims condo markets have collapsed in a number of cities. Boston and D.C. are listed as victims. Dust up should not be too horrible as those places tend to have highly educated people who earn good incomes. Stil bad though. Vegas and Miami are probably completely hosed. Too bad. Likley with a short lag that residential will follow.
So much misunderstanding here. No realy sense of the difference between nominal and real increases. Even if prices of homes on average increased by say 4%, that is a nominal gain--inflation is on the increase as Fed has done all it can to stimulate the economy. Also, methods used by BLS to calculate inflation/price indecies under attack for understating. All in all if you are in a bubble area (Vegas Miami--plus why would you want to live there anyway) you are likley hosed, if you are in a St Louis, Dallas, Austin you will be feel some pain but it won;t be too bad. Cheers.
Shortage of coins hits gold market
Published: Monday, 15 January, 2007, 11:54 AM Doha Time
By Pratap John
DISCERNING gold buyers have to make do without coins these days due to shortage in the local market, as the price of yellow metal again started increasing after a few days' stability.
Industry sources yesterday said there was a short supply of gold coins primarily due to their heavy demand in Dubai, the main regional source for gold.
The spurt in the demand of gold in Dubai is due to the ongoing Dubai Shopping Festival (DSF) during which jewellers offer special incentives and prizes to customers.
The manager of a leading Doha jewellery shop told the Gulf Times yesterday that gold coins were not available in most city outlets now.
"We have been facing a shortage in gold coins in the last few days. Normally, we get gold coins and other jewellery items from Dubai. But due to the DSF, there is no adequate supply from there," he said.
Sources said the greatest demand is for gold coins weighing 8gms or a sovereign. Gold coins of 2gm and 4gm are also available, mostly on demand.
They said another reason for the current shortage of gold coins was the long holidays due to Eid al-Adha.
"Imported gold needs to be certified by the municipal authorities before they can be sold in Qatar. The department did not function during Eid al-Adha. Hence whatever imports made could not be certified," an industry source pointed out.
Meanwhile, gold prices have again started climbing after a few days' stability.
Gold closed at QR70.50 for 22-carat and QR76.50 for 24-carat in the local market yesterday.
And for 10 tolas (116gm), the price was QR8580 yesterday. A few days ago, it was stuck at QR8,380.
Despite the rising prices the gold sales have been brisk as before, a jeweller said.
"Many see gold as a safe investment. And many customers think the gold prices are unlikely to fall, though they may not shoot up in the short to medium-term. Hence it is being considered a reasonably good investment," he said.
Industry sources said the business seen since mid-November was sort of "unprecedented".
Sales had gone up because of 15th Asian Games in Doha. Both visitors and residents seem to have contributed to this.
Jewellers said many visitors to the Games and athletes purchased gold during their shopping.
Expatriates who flew out on holidays taking advantage of schools closure during the Games had also purchased gold.
And towards the year-end, the gold sales have surged primarily because of Christmas, Eid al-Adha and the New Year, said A V Joju, an executive with Joy Alukkas Jewellery.
Joju said though there was no marked difference in gold price worldwide, many expatriates, particularly non-resident Indians, buy the yellow metal from the Gulf due to the "guarantee on quality".
Also, a wide range of designs was available in jewelleries across the Gulf.
A jeweller said the prices might not remain stable in the coming weeks due to the current fluctuation in crude oil price.
"The price of oil has a bearing on the gold price in the international market. So, the price of yellow metal will depend on how the crude price moves," he said.
In the last two years, prices in the international market have more than doubled, causing a sharp decline in the metal's retail business.
This was due to a combination of factors including skirmishes in many regions, declining bank interest rates and bearish run in capital markets worldwide.
How's that $100 oil prediction coming everyone?
What about the $1000 gold prediction?
LV and Miami are likely hosed? Wow talk 'bout a flashback to mid-90s terminology. I knew your Ozzies were a little behind the times, but yikes!!
I'm in the market for a 3BR ultra-luxury ocean front condo in South Beach. Must be 2 million or less....prolonged silence...thought so. This blog is pretty much irrelevant now, isn't it?
Oil below $51....how's that HYPERINFLATION coming along boyz and girlz?
You had your chance last year renters. You got greedy. Six counties of Southern California median price up 3.3% in December...and yes renters, that was 3.3% compared to December 2005.
Is it slowly starting to sink in that you will be renting the 1 bedromm apartment for the rest of your lives?
Oh but I know, I know, the housing market goes down slowly. Sure thimg renters, sure thing. It goes dow slowly by going up 3% YOY.
Why should you trust a real estate agent?
All you nuts can live in your caves and hoard your money while I get rich.
Thanks...idiots!
Global business optimism ‘at 5-year high’
By John Willman, UK Business Editor
Published: January 16 2007 17:07 | Last updated: January 16 2007 17:07
Global business confidence is at a five-year high, according to a survey by the Economist Intelligence Unit, which found nine out of 10 top executives rating business prospects over the next three years as good or very good.
The dynamism in emerging markets – especially China and India – was the main reason for this optimism, with a majority of the 1,006 executives from around the world planning to invest more in developing countries than in developed economies.
ADVERTISEMENT
However, the greatest concern among the executives was the shortage of talent in emerging markets, despite the large numbers of students graduating each year in China and India. They say that a relatively low proportion have the skills required by global firms, and that competition for those that do is intense.
“The consequence is wage inflation and high staff turnover,” said James Watson of the EIU.
The survey, which polls more than 1,000 executives every year, is sponsored by UK Trade and Investment, a government body that promotes British exports and inward investment. More than half held top positions in their companies, with Asia and North America each providing a quarter and 40 per cent from Europe.
Nearly a third of the executives rated business prospects “very good”, compared with just six per cent five years ago. Given the strong global economic outlook, growth in sales was regarded as a greater priority for 2007 than controlling costs.
Rising demand in developing economies was cited by 34 per cent as the strongest influence in the global economy, followed by 32 per cent who said global sourcing. Most executives saw emerging markets as a route to cutting costs and viewed developed economies as a source of ideas and innovation.
Nonetheless, there were concerns about political uncertainties in the Middle East and worries about financial risks with interest rates rising and a slowdown in the US housing market. Barriers to trade and investment continued to trouble many of those in the survey.
India-based executives were more optimistic than those based in China, with 70 per cent saying prospects were very good, compared with just 3 per cent of those in China.
But labour shortages were a concern in both countries, with 20 per cent wage inflation in India’s information technology sector and annual staff turnover rates of 20-30 per cent in China.
The global executives said they were investing more on training and development to develop their future leaders, and placing greater emphasis on performance-related pay to retain and motivate their staff.
The pinch it being felt in suburbs of Washington,DC. Prices down about 10% so far. Tax revenue is not meeting local governments desires.
http://tinyurl.com/2hdvhx
"The shortfall is due mainly to the falling real estate market, which equates to falling assessments, Christopher E. Martino, the county's director of finance, said in a recent presentation to the Prince William Board of County supervisors
In July, 50 percent of houses sold in the county sold for less than their assessed value, Martino said"
That's what they said about tech in 2000, fucktard!
With all the stuff the derivative market is holding at the moment, yeah, that's a bottomless pit for the bad stuff. So it's different this time. That's why the stock market goes only up without fear of a correction. Or why business optimism is at a high.
But just beware. There have been other manias where "it's different this time" was said too. And unless the laws of physics have been broken, what goes up must come down. If you disagree, then just continue to hope the derivative market can keep hiding the bad stuff.
"You had your chance last year renters. You got greedy. Six counties of Southern California median price up 3.3% in December...and yes renters, that was 3.3% compared to December 2005."
Oh no, six counties.
Meanwhile, from your heroes at the NAR:
http://online.wsj.com/public/resources/documents/bbexhome.htm
The national median existing-home price for all housing types was $218,000 in November, which is 3.1 percent lower than November 2005 when the median price was $225,000.
The median existing-home price in the Northeast was $269,000, down 2.2 percent from a year earlier.
The median price in the West was $351,000, down 0.8 percent from November 2005.
The median price in the Midwest was $165,000, which is 3.5 percent below a year ago.
The median price in the South was $179,000, down 3.2 percent from November 2005.
A 3% loss doesn't work so well when you're playing on 0% margin. If that didn't shake you out, don't worry, bigger ones are coming. But tell us again how 15% is in the bag for 2006, how the national price has never gone down and never will. Don't forget to mention how rates are finished going up.
No wonder you're a homedebtor - too poor to rent. Eventually I'm guessing you debt-tards will elect a raft of limp-wrist Dems who will then try to bail you out by throwing the borders wide open and letting the immigrant hordes occupy the sea of empty shitboxes around you. That might save your housing bubble, but you'll be welcome to the crime-ridden hellscape that results. I'll have fled to someplace too expensive for debt-ridden manlets, sorry!
Two years ago there was not enough land so price went up. But today there too much Land. So what changed, did the popular just drop off in the past two years?
ALISA ROTH: Land is what's causing a lot of the problems for homebuilders these days. Too much of it.
ERIC LANDRY: There was virtually a race for land throughout all the hot areas in the country.
That's analyst Eric Landry. He follows homebuilders for Morningstar. He's talking about places like Las Vegas, Phoenix, Southern California, and much of Florida. That's where homebuilders, speculators and homebuyers had been having a field day.
The bonanza's clearly over. And Landry says we still haven't hit the bottom in a market saturated with supply.
LANDRY: Until the overall market sops up all of those excess units, there's gonna be a problem with new home construction.
http://marketplace.
publicradio.org/shows/2007/
01/16/PM200701161.html
Tomb, Sweet Tomb
Homebuilders continue to get stuck in the stucco.
The Big Bad Wolf is huffing and puffing at the homebuilders again. This morning, Centex issued a bleak outlook in its preliminary fiscal third-quarter report. The real estate developer expects a loss of $2 a share for the period.
Business is going to get worse before it gets better. The company is reporting a 12% dip in successful closings for the December quarter, but a 24% dive in new home orders. In other words, we can expect Centex's top-line declines to accelerate in the coming quarters.
http://www.msnbc.msn.com/id
/16653908/
"We are navigating through one of the most challenging housing environments in the past 25 years," said Centex Chairman and CEO Tim Eller.
"We are responding by reducing our land position and inventory, aligning our workforce to the current sales pace and improving our overall cost structure."
Centex further said it will take a charge of $150 million to walk away from land options. KB plans to take an $88 million charge for the same reason.
Wachovia Capital Markets analyst Carl Reichardt thinks homebuilders have not done enough to remove the excess inventory.
"We believe home prices are still not low enough to aggressively attack the inventory overhang problem.," he said in a note to investors.
"Builders have yet to be aggressive enough on sales prices to move their most aged inventory."
ResCap, the holding company for the real-estate financing business of GMAC, said on Tuesday it would cut 1,000 jobs -- about 7 percent of its work force -- in a cost-cutting triggered by a slack U.S. housing market.
ResCap said it would incur a charge of about $10 million as a result of the job cuts, but expected to save $65 million in 2008 as a result of the reduction in its payroll.
The company said in a filing with U.S. securities regulators that it would cut 800 jobs by October and eliminate another 200 unfilled positions. The majority of the jobs would be cut in the first and second quarters of this year, ResCap said.
In its filing with the SEC, ResCap cited slower mortgage originations, a weakening trend for U.S. home prices and weakness in the sub-prime sector of the lending market as reasons for the job cuts.
http://today.reuters.com/
news/articlebusiness.aspx?
type=bankingFinancial&story
ID=nN16236878&WTmodLoc=InvA
rt-R2-IndustryNews-
2&from=business
US Sanctions are Needed
Governor Toshihiko Fukui risks appearing to yield to government pressure, hampering his plan for gradual rate increases to head off a repeat of the 1980s stock and property bubble that triggered a decade of stagnation. Thirty-five of 52 economists surveyed by Bloomberg News before the reports forecast Fukui will lift the key lending rate to 0.50 percent.
``This is a shame and disgraceful,'' said Tomoko Fujii, senior economist at Bank of America N.A. in Tokyo. ``Can't they trust their own central bank? This kind of thing never happens in the U.S. and Europe.''
Investors see a 31 percent chance the bank will increase borrowing costs this week, down from 80 percent yesterday, according to Credit Suisse Group.
www.bloomberg.com/apps/
news?pid=20601087&sid=
a9wOhlBk_OeA&refer=home
Yet United States auto industries will pay the price for BOJ decision of not returning to a more normal monetary policy.
Specifically, Detroit auto officials say the artificially weak yen gives Japanese automakers a windfall of $3,000 to $9,000 per vehicle. Automakers say the Japanese government is maintaining a weak yen artificially to give its manufacturers that edge.
www.washingtonpost.com/wp-
dyn/content/article/2006/11
/13/AR2006111301166.html
To the Anon that posted that housing is up 3% in southern california. What is your definition of southern california? From what I have read at housing-watch.com, they are down. What gives? Where are you getting your stats...or are you just making them up??? Or will I be renting for the "rest" of my life? Gosh, people are stupid. Yes, I'm talking to you. Go buy a few houses, would ya...
The yuan rose to its highest since the end of a dollar link in 2005 on speculation China will permit faster appreciation to narrow its record trade surplus.
Allowing the yuan to rise will make Chinese exports more expensive relative to those of Asian rivals, slowing sales overseas and helping to narrow the trade gap. The surplus, which has driven China's foreign-exchange reserves to more than $1 trillion, will make it more difficult for the government to slow growth that is the quickest among major economies.
U.S. lawmakers claim China's exporters are taking away market share, widening the trade gap between the two nations and causing joblessness among Americans.
http://www.bloomberg.com/
apps/news?pid=20602097&sid=
aKBuLMpvEf5g&refer=
world_currencies
Former Cendant Corp. Chairman Walter Forbes should be sentenced to more than 12 years in prison and pay more than $3 billion in restitution for leading the largest accounting fraud of the 1990s, federal prosecutors said.
In October, a jury found Forbes guilty of conspiracy to commit securities fraud and two counts of making false statements in a massive fraud scheme that cost the travel and real estate company and its investors more than $3 billion. He was found not guilty of a fourth count, securities fraud.
Cendant's real estate brands included Coldwell Banker and Century 21.
http://www.1010wins.com/
pages/185384.php?
contentType=4&contentId=
290619
Do the Apollo/Realogy Acquisition Make Sense, Are there Redundancy, and Will there be Cost Saving?
Apollo is buying a company that has struggled as the real estate market has weakened.
The price Apollo is paying ``takes into account the substantial pressures and uncertainties facing the residential real estate markets that may well continue for some time,'' said Henry Silverman, Realogy's chief executive officer.
Silverman in 1997 created Cendant, a travel, leisure and real-estate business that spun off Realogy as part of a breakup of the company.
Realogy now employs about 15,000 people and has 300,000 affiliated brokers at units including ERA, NRT Inc. and Sotheby's International Realty.
www.bloomberg.com/apps/
news?pid=20601103&sid=
acfdv6YjFMG4&refer=news
My suspicion was raised as I attempted to follow the mortgage broker's advice after closing 9/5/6. Here's the scheme:
(1) purchase agreement for $195,000 and price raised to $218,000, anxious seller to pay buyer's closing costs,insurance, warranty, and taxes for 1 year;
(2) appraisal not done despite requests; and
(3)mortgage broker/mortgage company, lender gave fraudulent, deceptive information relative to contracts and additional lending/consolidating other debts.
Seller is elderly couple who purchased home for daughter from estate trust. Retirees moved from Pennsylvania to Florida. Their real estate agent here in Kingsport, Pat Searles (Coldwell-Banker); my real estate agent was Debbie White (Crye-Leike Realtors Johnson City). Both agents insisted Seller rejected my offer; called him and he said he did not reject my offer.
Both agents contend husband is very ill and incapable of remembering price of the sale. The Seller did not have a family member or lawyer during the proceedings nor a power of attorney; not at closing.
My first conversation with them was this week when I contacted them to confirm acceptance of my original offer: 195K. Paperwork confirms they neither rejected nor countered the offer, but price was raised to $218K, agreed to pay Buyer's closing costs.
Sandra Fowler, mortgage broker with Abstract Mortgage Knoxville, working with Decision One Mortgage, insisted that I continue the closing on 9/5/06.
I was concerned about high monthly payment; she was aware of remaining debts. Ms. Fowler insisted that I could go out the next day with copy of deed that she would give me, and secure a loan to consolidate my other debts.
Since August, I've conferred with her about high debt-to-income and other lenders. Since closing, her advice has been "borrow against your retirement, borrow from your retirement, "I'll make some contacts and get back with you", and "keep trying there are folks out there who will help you" all toward a 200 point reduction in my credit score (inquiries) which I've worked so hard to improve.
Per her knowledge of the real estate and the mortgage industry, she knew very well that I could not get additional lending because of the recent sale; seasoning. I didn't know that I couldn't do this, but Ms. Fowler did.
As it turns out, the bogus appraisal she used was actually an on-line list of uncomparable comps AVMs in the area. I didn't know about all the deception and fraud involved: the inflated price, the phony on-line appraisal, the inability to restructure or consolidate debts. I trusted these professionals to guide the process and ended up paying an additional $23K.
The Seller received a check for $195K. Now the agents say Seller didnt understand them and I ended up paying closing costs. My application says I make $90K/yr (NOT); also says I've worked 18 years here and my birthday is wrong! I signed, but they knew the sale price $195K all along; they made good money from the sale.
www.mortgagefraud.org/
display/ShowPost?moduleId
=847766&discussionId=
15521&postId=178290
Renters are in full spin mode today. Last week NYC prices showed a 19% YOY increase. Yesterday greater Los Angeles showed a 3.3% YOY increase.
When a Topkea or El Paso goes up 10% you wankers smirk and say "ha ha ha Topkea, who cares". Now NYC and LA are both back on the upswing and you fucknuts use the excuse, well it's only LA and NYC, not the whole country and besides if you exclude David Beckham's (yet to be purchased) house those LA numbers mean nothing.
Pathetic.
Just FYI-
Fannie Mae furlowed all non-essential contract employees for about three weeks over the holidays and into the new year.
This week they just announced a hiring freeze with no announced end date.
Freddie Mac will probably soon follow suit.
To the Anon that posted that housing is up 3% in southern california. What is your definition of southern california?
WOW. Now you are pulling a Bill Clinton and debating what the word "is" means. OK smart guy, to me Southern California is Los Angeles, San Diego, Ventura, Orange, San Bernardino and Riverside counties. The median in all 6 counties was $495,000 in December. This median was 3.3% higher than the median price in all 6 counties in December 2005.
I don't think it can be any easier to understand than this.
http://housing-watch.com/regionview.aspx?city=Salt-Lake-City
Does this look like a crash to anyone? 58% YOY increases in price in Salt Lake City.
Oh but SLC doesn't matter since it's Mormon and the name has the word Salt in it...I mean who can take seriously a city that has the word Salt in it...what's next Pepperville?
CBS: Military Tells Bush It Has Only 9,000 Troops Available For ‘Surge’
A State Department official leaked word this week that President Bush is considering sending “no more than 15,000 to 20,000 U.S. troops” to Iraq. “Instead of a surge, it is a bump,” the official said.
This claim was bolstered last night by CBS’s David Martin, who reported that military commanders have told Bush they are prepared to execute a troop escalation of just 9,000 soldiers and Marines into Iraq, “with another 10,000 on alert in Kuwait and the U.S.”
Watch it:
The Washington Post reports today that “deep divisions remain between the White House on one side and the Joint Chiefs and congressional leaders on the other about whether a surge of up to 20,000 troops will turn around the deteriorating situation.” The Post also provides more context about an administration official’s recent claim that the escalation is “more of a political decision than a military one.“:
The U.S. military is increasingly resigned to the probability that Bush will deploy a relatively small number of additional troops — between one and five brigades — in part because he has few other dramatic options available to signal U.S. determination in Iraq, officials said. But the Joint Chiefs have not given up making the case that the potential dangers outweigh the benefits for several reasons, officials said.
Escalation backers have already begun distancing themselves from this plan. Sen. John McCain (R-AZ) said yesterday that not sending enough troops would be “worse than doing nothing.”
REPORTER: The president is expected to give his speech on a new way forward in Iraq next week. CBS’s David Martin has learned military commanders told the President they could execute a ‘troop surge’ of 9,000 soldiers and Marines into Iraq, with another 10,000 on alert in Kuwait and the U.S. Two army brigades — about 7,500 troops — would go into Baghdad in an effort to control the violence, clearing neighborhoods and staying long enough for reconstruction projects to take effect. 1,500 Marines would go to the western province of al-Anbar, heartland of the Sunni insurgency. This, even though the Commandant of the Marine Corps was quoted as saying he did not see a need for more battalions. But aides say the President still hasn’t decided for sure on a plan.
TONY SNOW (CLIP): The President understands this is important and needs to be done right.
ANCHOR: And details for the President’s proposal on Iraq are still being hammered out, but Pentagon officials are sure the President will order more troops to Iraq.
"Does this look like a crash to anyone? 58% YOY increases in price in Salt Lake City."
Anonymous,
Not to discount your point, but seriously Salt Lake is about two years behind the rest of the country in everything. Real estate included. Prices started dropping everywhere else before they started rising here!
On another note, what do December's foreclosure rates tell us?
Not to discount your point, but seriously Salt Lake is about two years behind the rest of the country in everything. Real estate included. Prices started dropping everywhere else before they started rising here!
Of course there is always a "but" whenever anyone points out increases in prices.
SLC up 58%, doesn't count since they are not cool. OK. What about San Francisco? Are they "hip" and with the times enough to count? According to housing-watch.com median price today is 0.7% higher than at this time last year.
Price up month to month you counter well it's down year to year.
Price is up year to year you counter well it's down month to month.
So. Cal is up 3.3% YOY you say well So.Cal doesn't count because it's California and people want to live there.
NYC up 19% you say NYC doesn't count because it's all due to Wall St. bonus money and the prices are just a one time deal.
SLC is up 58% YOY you say SLC doesn't count because they are behind the times.
Here are some more examples of YOY price gains from housing-watch.com. I'm looking forward to the reason why they don't count from HP.
Seattle up 12.8% YOY. Possible spin from HP: It's all MSFT money, doesn't count. And it rains a lot there too so it doesn't count.
Portland up 7.6% YOY. Possible spin from HP: too rainy so it doesn't count. Too close to Seattle, so it doesn't count.
Philadelphia up 1.3% YOY. Possible spin from HP: Too close to NYC so Wall St. effect thing. Too cold, people can't think rationally and buy expensive homes.
Dallas up 2.0% YOY. Possible spin from HP: It's Texas, what do you expect? Doesn't count.
Atlanta up 4.6% YOY. Possible spin from HP: Dumb rednecks, they don't know anything, doesn't count.
But mention the fact that Boston is down 1.4% and it's proof positive that a 60% crash is coming.
Anon: "How's that $100 oil prediction coming everyone? What about the $1000 gold prediction?"
Wow, you're very short-term focused. The "trend is your friend". Keep in mind, the long term fundamentals have not changed. Oil last year had a base "economic" value of about $50, the rest was a mark-up for the: 1. geo-political risk component and 2. investment component. There was massive manipulation on the investment component to the tune of many trillions of dollars.
So either the US Government is planning a hit on Iran and is working the markets down OR they are continuing on their program dis-inflation before they can do another round of credit creation (re-inflation).
To do another round of credit expansion (re-inflation) they need: 1. room to lower interest rates (which they now have), 2. the appearance of de-flation (the government can't have people anticipating high current/future inflation so it MUST control the inflationary EXPECTATIONS), and 3. sufficient US Dollar strength (the FED are prepared to sacrifice the US $, if necessary, to 40 - 55 over the next few years).
The US can't afford to let the housing bubble to deflate and will eventually end up in hyper-inflating and probably moving to the Amero (the CFR sponsored currency for the American Union [America, Canada, Mexico]). So I expect of the next 10 years housing prices will go up significantly, but in terms of real values, they will decline rather spectacularly. This is very common in high/hyper-inflationary environments...stock markets and other prices may go up but in real value terms, they are actually going down.
In any case, the fundamentals for energy such as oil, nat. gas and uranium looks extremely bullish over the LONG term. Remember cycles can take place over years, decades and even centuries. For instance, lets say you were investing in water. Allot of the smart money began buying up in the mid to late 90s..they are way ahead of the public who tends to follow day by day events rather than long term trends. Why do you think the Bush family bought up almost 80,000 acres in Paraguay?...they are locking down the water aquifers there. The major laws, international agreements such as NAFTA/CAFTA/FTAA (read: treaties) they are putting in place "under the radar" of most people and infrastructure being put in place in most major cities will make them further fortunes.
It's really no different from the game being played with major US interstates and other formerly publicly owned infrastructure such as ports and airports. Public assets paid/built by Americans are being "leased" out to foreign owned companies (often Spain, Austrilia) which behind the scenes they own - quite the con game being played at the expense of the public.
Oil WILL hit and surpass $100 just as energy and resources will be the MAJOR theme over the next few decades.
Fannie Mae furlowed all non-essential contract employees for about three weeks over the holidays and into the new year.
This week they just announced a hiring freeze with no announced end date.
Freddie Mac will probably soon follow suit.
+++++++++
This is scary. I think these folks are in trouble and I'm not surprised. We've been hearing hints of their falling apart for months, if not years.....
$100 OIL uhm yeah sure thing. I think that will happen right around DOW 36K, give or take a month.
Oil is at $50 and falling and you numbnuts are talking $100....do you have ANY sense of reality at all?
Why do you think the Bush family bought up almost 80,000 acres in Paraguay?...they are locking down the water aquifers there.
So now Bush is controling the water supply too. WHOA!! First oil now water...damn!!
i was just driving home near downtown phoenix, and there was a big lexus right in front of me on 7th street.
it had the real estate clerk mandatory cute license plate tag and border, something like "RLTR4U". barf.
then a big sign in the rear window indicating the lexus is for sale.
imagine my puzzlement - i thought the clerks only leased.
Anon: "So now Bush is controling the water supply too. WHOA!! First oil now water...damn!!"
No, it is OBVIOUSLY just one business the Bush family is invested in. People do not get rich following the timid herds nor do they get rich by being ignorant of geo-politics. The Bush/Clinton families are very strategic planners and certainly make use of technology (example: satellite technology for locating aquifiers), political connections and geo-politics (aside from being rather ruthless). Why do you think most recent agreements (read:treaties) always include WATER?
Let me guess, you have no investments in water or water related businesses at all? Back in the mid-90s when I saw the smart money buying up water related assets either directly or through controlled multis (ie Nestle), I bought up some as well. The month the Thai baht bottomed (always buy low), I purchased water rights to a major watershed area in Asia. My research indicated that China, India and the Asian nations would prosper greatly in the future years and that there would be a future shift from equities back into commodities. Of course back then, the herds were all piling into "tech stocks" of the giant NASDAQ/tech bubble.
With ASEAN trading block representing about 1/2 of the worlds inhabitants, and with China/India expected to have about a 50% share of world GDP by 2050, I think it worked out remarkable well. Not to mention there are HUGE shortages in the area of energy, food and resources on the hoizon. Man, did some people miss out!
After all, who's smarter? The man whom simply bottles and endless river of water (yes, one asset I own is a water bottling company) or the person who actually pays $1/liter or more at a store? What costs more in your area, bottled water or gas?
Anon: "Oil is at $50 and falling and you numbnuts are talking $100"
Hello?...did you read my above comment. I think it was a recent 7.4 Trillion dollar play which greatly reduced the INVESTMENT component of the price of oil. Again, the price of oil is essentially: 1. economic value component (about $50 / barrel), 2. geo-political risk component and 3. investment component. And once again, it is likely that either a. they are gearing up for a hit on Iran in future months AND/OR b. they are creating an artificial dis-inflationary period so they can later re-inflate. It really isn't that complex.
The fundamentals have not changed, nor has the trends. Again, the "trend is your friend". You can't look at such shifts on such a small timescale. It's like trying to play the FOREX while watching the "nightly business news" (does anyone actually get their "news" from the TV?) to see what the US Dollar is doing. you can't look at the daily price of oil and hope to understand what is going on. The FED and the government will beat down the price of oil/energy, gold and such items before they get ready to re-inflate. It's a great buying time, IF, you have the balls and you know what you are doing.
Especially in a nation like the US, which imports about 70% of it's daily energy requirements you really should become more aware of what is going on. For example, the SCO will replace OPEC as the dominant force in the oil/energy markets. Have you even heard of the SCO or understand the huge shifts taking place? The multis like Exxon only have access to about 6 - 8 % of the worlds remaining oil supplies are now largely "bit players"...most oil is now controlled by the NOCs (National Oil Companies). Think Russia, Saudi Arabia or Venezuela. You really should do some research into these areas and stop thinking short term.
FYI:
Major oil imports to US Oct 2006:
Canada - 1.7 Mbpd
Mexico - 1.5 Mbpd
Saudi Arabia - 1.33 Mbpd
Venezula - 1.1 Mbpd
Nigera - 1.0 Mbpd
Angoloa - 0.5 Mbpd
Iraq - 0.5 Mbpd
Lets see:
a. If all the plugs are pulled out, they may get tar sands production to 3 Mbpd in a few years, just about same the amount used up in Canada. Of course, North American natural gas supplies (already in decline) will run out long before the oil can be removed. Changing gold (natural gas) into lead (sour oil) isn't exactly a smart thing to do.
b. Mexico will cease to be an oil export nation within 3 years due to depletion of the Cantrell oil fields. They have very high water cuts now and are in the late stages of the HL depletion curve.
c. The Ghwadar in Saudi Arabia has a rig count 60% over average and a water cut of over 55% so they are in a decline stage now.
d.Venezuela isn't exactly friendly to the US and it's recently had to buy oil from Russia to make up for shortfalls in oil production which is declining.
..and so on.
Anyways, turn off the TV, do some INDEPENDENT RESEARCH and go figure it out. I bought into oil a few years back when it was under $10 / barrel, let me guess, you didn't? Man, did you miss out.
I'm an investor. At one point I owned 5 homes. Sold 3 of them. I still have 2 which I am renting.
I put an ad up on craigslist and in the paper which started running today. It is 11:15am and have had 3 calls already and have an appointment at 1:30 to show it. I am asking $2400 a month. My total carrying cost is $2250 a month for everything including landscaping costs
So basically you are getting a 6% return (plus appreciation if any) and tax benifits. So good for you.
Unless of course you lose a month or two in changing tenants.
So, yeah its possible to be a landlord and make money at it.
I hope that is a fixed loan for your holding costs. If you get it rented.
First off, these are all median (50%) asking price, I personally like to see initial asking - sell price...but those numbers are hard to come by and lag by 2+ months. I respect data, so I won't go looking for stuff that specifically goes against what you posted.
> So. Cal is up 3.3% YOY
San Diego and surrounding :
01/15/2007 - $524,500
1 month +0.9%
3 month -0.8%
6 month -2.7%
9 month -2.0%
L.A. and surrounding :
Trend 01/15/2007 - $549,000
1 month -0.2%
3 month -1.9%
6 month -4.5%
9 month -5.3%
> NYC up 19%
NYC :
Trend 01/15/2007 - $449,000
1 month -0.2%
3 month -2.4%
6 month -4.4%
9 month -4.3%
> SLC is up 58% YOY
This market is indeed rising :
Trend 01/15/2007 - $389,900
1 month +1.3%
3 month +4.0%
6 month +0.2%
9 month +18.2%
>Seattle up 12.8% YOY.
>Portland up 7.6% YOY.
>Philadelphia up 1.3% YOY.
>Dallas up 2.0% YOY.
>Atlanta up 4.6% YOY.
I didn't pull the stats for these, but I did come to realize these are all areas with already low housing prices that did not increase much over the last 5 years (near the national average). I also wish the data would go back to the start of 2005 as that includes peak numbers. If it started at $350K, went to $250K in 2006, then went up to $270K by 2007....would that be something to brag about???
I think the places that showed a LOT of growth are going the other way. Maybe the growth in places with increasing markets is coming from people wanting affordable housing (moving to the area) or that these are the homes that have not sold based on pricing? Maybe they really are desirable and people are willing to pay? I cannot deny that the markets may indeed continue to rise, just slower.
Look at places like Santa Barbara, San Jose, Washington DC, Las Vegas, Phoenix, Reno, Orlando, Boston, Irvine (CA), Miami, Riverside (CA), etc.
In the end, the average trend is still DOWN 3+% YOY. That is difficult to explain away.
An outrage. The illegal who was smuggling 800 pounds of drugs into the US was given immunity to turn Federal witness againest the two border patrol men who got 10 years.
iw
Petition to President Bush
Wednesday 01-17-2007 5:11pm
Grassfire.org is petitioning President Bush to pardon the two border patrol agents sent to prision for shooting an illegal drug smuggler at the border. The petition reads:
To: President George W. Bush,
As a citizen of the United States I am outraged to learn that two U.S. Border Agents have been convicted of lengthy prison terms for doing their jobs-- pursuing illegal aliens who cross our border, and I'm calling on you to officially pardon them for their actions.
I am even more outraged to learn that this illegal alien (who was attempting to smuggle about 800 pounds of marijuana into our country), was tracked down by a Department of Homeland Security Investigator and granted immunity for his testimony against these two agents!
This is a terrible injustice, and I urge you to use your considerable authority and power to pardon these two agents and right this obvious wrong!
To send a personal copy of this petiton go to http://grassfire.org/142/petition.asp
U.S.BORDER CONTROL
Despite pleas for new trial, calls for investigation, Border Patrol agents receive lengthy sentences
October 20, 2006
Despite a plea from their attorney for a new trial after three jurors said they were coerced into voting guilty in the case, and despite calls in Congress for investigation, two U.S. Border Patrol agents have received lengthy prison terms. The two had shot a drug smuggling suspect in the buttocks as he fled across the U.S.-Mexico border in 2005. The suspect had been driving a van loaded with 743 pounds of marijuana across the border.
The U.S. District Court Judge in El Paso, Texas, Kathleen Cardone, sentenced Jose Alonso Compean to 12 years in prison and Ignacio Ramos to 11 years and one day in prison. They had been convicted in March on charges of causing serious bodily injury, assault with a deadly weapon, discharge of a firearm in relation to a crime of violence and a civil rights violation.
Much of the evidence against them came from the drug runner, Osvaldo Aldrete-Davila, who reported the shooting to a friend at the Border Patrol in Arizona. Aldrete-Davila was given immunity by the U.S. attorney's office. A federal jury convicted them after a two-week trial. The Border Patrol fired both men after their convictions. The judge ordered them to report to prison Jan. 17.
Outraged supporters and anguished family members packed the courtroom, and many wept as the sentences were announced. Outside the courthouse, members of the Minuteman Project, which opposes illegal immigration, carried "Free Nacho" placards.
Anti-immigration activists and advocates of stronger border security argue that the case epitomizes the misplaced priorities of federal prosecutors as well as the absurd predicament of Border Patrol agents, who must fight heavily armed criminals while using little or no force. Among the rules broken by the agents, supporters note, was a policy forbidding agents from giving chase.
Aldrete-Davila was shot after he illegally entered the United States near Fabens, Texas, and refused efforts by the agents to stop his vehicle. Court records show he jumped from his van and ran south to Rio Grande, where he was confronted by Compean, who was knocked to the ground. Aldrete-Davila managed to cross the border and escape in an awaiting van.
Aldrete-Davila has filed a claim with the Border Patrol, saying the agency was negligent and asking for $5 million in damages.
Congressmen appeal to Justice for border agents
WorldNetDaily ^ | 1-10-2007 | WorldNetDaily
Posted on 01/10/2007 8:24:16 AM PST by jmc813
As two border patrol agents face the commencement of prison terms for shooting and wounding a man smuggling drugs into the U.S, five congressman are calling on Attorney General Alberto Gonzalez to intervene.
The lawmakers have asked President Bush to pardon Jose Alonso Compean and Ignacio Ramos, who were sentenced to 12 years and 11 years, respectively, in October. But the sentences are scheduled to begin Jan. 17, and in lieu of a pardon, the congressmen are asking Gonzalez to request the Justice Department to direct federal prosecutors not to oppose a court motion to keep the agents free on bond during the appeals process.
The drug smuggler was granted immunity for his testimony.
Reps. Dana Rohrabacher, R-Calif.; Ted Poe, R-Texas; Rep. Walter Jones, R-N.C.; Duncan Hunter, R-Calif.; and Tom Tancredo, R-Colo.; will announce their effort at an 11 a.m. news conference today in the nation's capitol.
The lawmakers said in a statement "several discrepancies in the government's case strongly question whether justice has been served, and permitting these men to be incarcerated in the interim puts their lives at risk."
The congressman will be joined today by Compean, former Border Patrol agent Andy Ramirez of Friends of the Border Patrol and T.J. Bonner and Rich Pierce of the National Border Patrol Council.
Bush has received a letter about the case from more than 50 Congress members, and Grassfire.org has an online petition calling on the president to pardon the agents.
Rohrabacher told WND last month he considers the case "the greatest miscarriage of justice that I've seen in my career."
"Two brave Border Patrol agents trying to enforce the president's nonsensical border policy ending up being sent to prison, while an illegal alien drug smuggler is given immunity and walks free," he said.
White House press secretary Tony Snow has said he cannot comment on presidential pardons.
As WND has reported, a federal jury convicted Compean, 28, and Ramos, 37, in March after a two-week trial on charges of causing serious bodily injury, assault with a deadly weapon, discharge of a firearm in relation to a crime of violence and a civil rights violation.
Ramos is an eight-year veteran of the U.S. Naval Reserve and a former nominee for Border Patrol Agent of the Year.
On Feb. 17, 2005, Ramos responded to a request for back-up from Compean, who noticed a suspicious van near the levee road along the Rio Grande River near the Texas town of Fabens, about 40 miles east of El Paso. A third agent also joined the pursuit.
Fleeing was an illegal alien, Osbaldo Aldrete-Davila of Mexico. Unknown to the growing number of Border Patrol agents converging on Fabens, Aldrete-Davila's van was carrying 800 pounds of marijuana.
Aldrete-Davila stopped the van on a levee, jumped out and started running toward the river. When he reached the other side of the levee, he was met by Compean who had anticipated the smuggler's attempt to get back to Mexico.
"We both yelled out for him to stop, but he wouldn't stop, and he just kept running," Ramos told California's Inland Valley Daily Bulletin.
"At some point during the time where I'm crossing the canal, I hear shots being fired," Ramos said. "Later, I see Compean on the ground, but I keep running after the smuggler."
At that point, Ramos said, Aldrete-Davila turned toward him, pointing what looked like a gun.
"I shot," Ramos said. "But I didn't think he was hit, because he kept running into the brush and then disappeared into it. Later, we all watched as he jumped into a van waiting for him. He seemed fine. It didn't look like he had been hit at all."
The U.S. government filed charges against Ramos and Compean after giving full immunity to Aldrete-Davila and paying for his medical treatment at an El Paso hospital.
The U.S. Attorney's Office for the Western District of Texas issued a statement in September arguing "the defendants were prosecuted because they had fired their weapons at a man who had attempted to surrender by holding his open hands in the air, at which time Agent Compean attempted to hit the man with the butt of Compean's shotgun, causing the man to run in fear of what the agents would do to him next."
The statement said, "Although both agents saw that the man was not armed, the agents fired at least 15 rounds at him while he was running away from them, hitting him once."
Ramirez of Friends of the Border Patrol said the drug smuggler has "fully contributed to the destruction of two brave agents and their families and has sent a very loud message to the other Border Patrol agents: If you confront a smuggler, this is what will happen to you."
TOPICS: Crime/Corruption;
Another (subprime?) lender bites the dust:
-----------------------------------
Funding America - www.famtg.com
Due to current market conditions in the mortgage industry, Funding America has decided to discontinue accepting any new business.
------------------------------
I can't find too much more about this company - size, employees so perhaps a real minnow in this field - still, coming in the wake of the Mortgage Banker Association economist stating that hundreds of subprime lenders will be out of biz- it confirms that.
The question is where the hell did all these lenders come from ? In these days of oligopolies in just about every field - how did these little companies come into being. We know they got THEIR money from the whales - the JPMorgans and so on and sold CountryWide, WAMU loans so...
It all smells of a cut-out / "keep us out of this shady biz but give us the money" type of wheeling and dealing by the big guys..
Any people deeply knowledgable about the mortgage banking field care to comment ?
-K
If the Federal Reserve position on the housing market is that there is "NO HOUSING BUBBLE" then why do the Federal Reserve need to be worry about pricking the "HOUSING BUBBLE"
Central banks should not try to prick house price bubbles but should prepare to step in quickly if an asset price bubble bursts, Federal Reserve Governor Frederic Mishkin said Wednesday.
http://money.cnn.com/2007/
01/17/news/economy/
fed_mishkin.reut/
index.htm?postversion=
2007011713
However, “Inflation may be a worry, and that is job one at the Fed: to control inflation,” said Kim Caughey, equity research analyst at Fort Pitt Capital Group in Pittsburgh.
Yesterday’s PPI figure “makes it more unlikely that easing will happen, and may make it likely for the Fed to raise rates.”
http://www.projo.com/
business/content/
BZ_wallst18_01-18-
07_Q63VN88.df01cf.html
Washington Mutual Inc., the United States' largest savings bank, said its net income rose 22 percent in the fourth quarter as profits from the sale of its advisory unit helped offset a loss in its home mortgage business because of problems with subprime loans.
That is like being in the resturant business and reporting that you made a big profit in selling off some of you cooking equipments on Ebay to off set the big lost in expense due to poor return on the sale of food (your cord business). No wonder Washington Mutual share price fell after hours.
In a conference call with analysts, Chairman and Chief Executive Kerry Killinger said the company had prepared for a slowdown in its housing business by sharply reducing its subprime mortgage lending and servicing.
"I've been pretty pessimistic on the housing market for the last couple of years, and really felt that the market was overheated and likely to be slowing at some point," Killinger said.
http://www.iht.com/articles
/ap/2007/01/18/business/
NA-FIN-US-Earns-Washington-
Mutual.php
It sure looks like one happy family sitting around the table in their new house on the Web site of Fremont Investment & Loan.
But the fast-growing California lender, which pledges to help the credit-challenged “realize the American dream of home ownership,” is earning a much different reputation here.
Just call it Boston’s foreclosure king.
Fremont, which specializes in so-called “subprime” loans with higher interest rates to borrowers with less than sterling credit, is now one of Boston’s top mortgage lenders.
But those loans are too often going bad fast. Fremont is tied to more than 120 of the roughly 1,100 foreclosure filings by lenders against Hub condo and home owners, according to John Anderson, a Dorchester foreclosure guru and head of The Real Estate Analyst, a business that tracks foreclosure filings.
That’s the largest share of any single lender, beating out a host ofso-called “predatory” lenders in the subprime market, which matches high-interest rate loans to borrowers with bad credit.
Fremont did not return my numerous phone calls.
“They are the champions of writing bad loans that go bad real fast,” Anderson contends.
http://business.
bostonherald.com/
businessNews/view.bg?
articleid=177529
However Fremont's CD's pay consistently higher rates than their competitors.
http://www.1800fremont.com/
IDA/certificatofdeposit.asp
Home 123 Corp. has closed two dozen offices since December, a spokeswoman for parent New Century Financial Corp. told MortgageDaily.com. The move resulted in approximately 200 job cuts.
http://www.rismedia.com/wp/
2007-01-16/lenders-still-
expanding-mortgage-
industry-insider-from-
mortgagedailycom/
Clear Choice Financial Inc. announced it is insolvent. More than 100 layoffs at a mortgage lending subsidiary began in December, CEO Chad Mooney told MortgageDaily.com.
http://www.rismedia.com/wp/
2007-01-16/lenders-still-
expanding-mortgage-
industry-insider-from-
mortgagedailycom/
“The main drag on economic growth is the housing market,” a situation that will continue into 2008, said Mark Zandi, chief economist at the forecasting service Moody’s Economy.com Inc.
Citing the sharp rise in mortgage delinquencies and foreclosures occurring throughout the country, Zandi said, the deterioration in credit conditions among some homeowners could threaten a turnaround in housing.
Defaults on the subprime home loans that have gone into mortgage-backed securities could prompt overseas investors to stop buying those securities, reducing the amount of credit available to future home buyers
http://content.hampton
roads.com/story.cfm?
story=117770&ran=165429
Here's a showstopper (and what a surprise, as we begin to learn about who's on the losing side of derivative trades, what their liability is, how they're handling it ("ya wanna go double or nothin'?"), and how much they understood it all in the first place. Oh, and who sold it to them???)
===============================
Local governments from Augusta, Georgia, to Oakland, California, are being lured by similar opportunities to speculate with derivatives created by the world's biggest banks. Most of the $400 billion of private agreements sold to municipalities escape taxpayers' notice and are little understood by the public officials and administrators who approve them.
The school board paid Frankfurt-based Deutsche Bank $575,000 to arrange the contract, known as a constant maturity swap, and awarded $400,000 to its financial advisers, including Reading-based Concord Public Financial Advisors Inc. and lawyers for arranging the trade, school officials said.
Ted Meyer, a spokesman for Deutsche Bank in New York, declined to comment on whether the agreement, also called a yield-curve swap, was suitable for the school district.
Dennis Kelley, the school district's director of finance, said he was "surprised" to learn he owes $230,000. He said the district would pay the money using proceeds from another interest-rate swap.
"Nobody Questioned It"
http://globaleconomicanalysis.
blogspot.com/
===============================
anon 10:51
You are comparing apples to oranges.
Selling prices are up 3.3% YOY in So.Cal. You are showing data for listing prices.
It is possible for listing prices to be down while selling prices are up for the same time period and area. It may seem counter-intuitive at first but it makes sense if you think about it.
Last year people were listing way above what they should have been. So you have Joe Shmoe listing his LA home for $675,000. His neighbor sold the same house for $625,000 and he was still in bubble mentality of ask what your neighbor sold for + $50K. Well nobody bought it for $675K and it was pulled from the market. But the housingtracker and housing-watch listing price for that house in December 2005 was $675K.
Now fast foward to Dec 2006. Joe lists his house again this time with a dose of reality thrown in at $640K. It sells for $635K. So the listing value is down significantly from $675K to $640K or -5.1%. But so what? What counts is that the selling price of the home went from $625K to $635K or 1.6%.
At the end of the day the only thing that matters in any of these conversations is selling price. Days on the market, asking price, inventory...it's all background noise. Only thing that matters is selling price. And in SoCal, in NY, in Seattle and in a host of other cities, selling price YOY is positive.
a jump of 660%?!? is that all???
“Residential foreclosure activity in San Diego County rose sharply in 2006, DataQuick reported. There were 1,612 foreclosures last year, compared with 212 in 2005, a jump of 660 percent. Notices of default, the first stage in the foreclosure process, totaled 8,816 during the year, compared with 3,933 in 2005, an increase of 124 percent, said DataQuick analyst John Karevoll.”
Moody needs to listen to
Federal Reserve Bank of St. Louis President William Poole.
The capital backing Fannie Mae and Freddie Mac did not warrant their top status with credit rating firms.
"On the basis of their capital these are not AAA credits, it is that simple ... they are not AAA without the federal guarantee, which the market thinks is there," Fed Poole said.
http://today.reuters.com/
news/articleinvesting.aspx?
type=bondsNews&storyID=2007
-01-18T005747Z_01_WAT006864
_RTRIDST_0_USA-FED-POOLE-
HOUSING-URGENT.XML
The Bank of Japan kept its key policy rate unchanged on Thursday, raising questions as to whether it succumbed to government pressure to hold off on a tightening.
http://today.reuters.com/
news/articleinvesting.aspx?
type=bondsNews&storyID=2007-01-18T053153Z_01_T359177
_RTRIDST_0_JAPAN-BOJ-
UPDATE-7.XML
Former MOF chief Masajuro Shiokawa drew up plans to buy 2 trillion yen of stocks directly from banks, and ordered the Bank of Japan to increase its monthly bond purchases to 1 trillion yen to drive bond yields lower
Tokyo Engineered cheap yen policy to boost Nikkei-225
The dollar’s rise to 120-yen inflated profits of Japanese multinationals such as Toyota Motor (TM) and Honda Motor (HMC). Toyota’s annual operating profit gains about 35 billion yen for every 1-yen increase in the value of the US dollar. Toyota Motor’s first-quarter profit rose 24% to 330 billion yen [$2.88 billion] for the three months ended June 30th, after boosting sales in the US by 12 percent.
Honda’s fiscal Q1 profit surged 30% to a record 143.4 billion yen, helped by the weaker yen. Honda earns 85% of its revenues in US dollars. Meanwhile, General Motor’s (GM) loss in the second quarter of 2006 was $3.4 billion after the automaker took a charge to eliminate 34,400 jobs. Toyota increased its US market share in June by 2.3% to 15.3% from the same period a year ago, while GM dropped 3.7% to 24.5 percent. Honda gained 1% to 9.2% in the same period.
http://japan.seekingalpha.
com/article/21646
The U.S. auto supply chain is under extreme pressure as changing market preferences, the rise of lower-cost suppliers from foreign countries and rising raw material prices have squeezed parts businesses.
Ford Motor Co. purchasing chief Tony Brown said Wednesday that the company's "watch list" of financially distressed auto parts suppliers has grown 44 percent over the past year.
Ford is shrinking its own chain of suppliers, which will likely will put more suppliers out of business, he said.
Brown noted that "the rate of supplier bankruptcies continues to climb." He said that auto-supply related Chapter 7 and Chapter 11 bankruptcies jumped 30 percent in 2006.
Brown said "industry experts and others at restructuring firms working with financially troubled suppliers expect we may well see in February the largest number of bankruptcy filings in the U.S."
http://www.miami.com/mld/
miamiherald/16483121.htm
Ya, those guys in the middle east are really hurting now that oil is at about $51. But it only costs them $2 to produce, and quess who pays for the transportation?
Market Disruptions
In the financial world, a rise in Japanese interest rates could have implications at home and abroad, according to Jennifer Amyx, a political science professor at the University of Pennsylvania and a member of The Graduate Group in International Studies at Wharton's Lauder Institute. In Japan, financial institutions are developing new approaches to attract savers. "A lot of individuals are now seeking investment vehicles with yield rather than being resigned to zero interest rates," she notes. "Financial institutions are scrambling to attract those customers."
Globally, the rise in Japanese interest rates will likely send the government debt market higher for the first time in a decade, adds Amyx, who published a book in 2004 titled, Japan's Financial Crisis: Institutional Rigidity and Reluctant Change. Meanwhile, foreigners who converted assets to yen -- in order to take advantage of low Japanese interest rates to invest elsewhere through this so-called yen carry trade -- may be squeezed as Japanese rates rise. "As the Bank of Japan raises rates and more investors start to buy into Japan's revival, the yen will appreciate. That dampens the carry trade which could lead to some disruption in markets," she explains. "What makes the phenomenon worrisome is that nobody knows how big the yen carry trade is."
Amyx does not think rates will rise rapidly, but adds "even a small change will have an effect on those kinds of flows." For example, investors who used yen-denominated loans to buy secure U.S. treasuries might choose to dump those holdings. Wharton's Allen agrees that the end of cheap Japanese loans could have a major impact on global finance. "That drying up of liquidity may change how the market works. It will be uncharted territory, not just for Japan, but for global capital markets as well."
In any event, Japan is once again viewed as a major player in the global financial structure. "Everybody has focused so much on China and India that they really haven't been looking at Japan," says Percival. "Japan is always going to be there. It's a big, strong economy with a lot of good companies and some that are not so good. There needs to be more of a focus on Japan."
http://knowledge.wharton.
upenn.edu
Why is the flood gates open?
The Bank of Japan pursued two strategies as it fought to bring the country out of the deflationary slump that gripped the nation after its stock market started collapsing in the 1990s.
* The bank cut short-term interest rates to 0%. This move received the most attention around the world.
* Faced with these deflationary expectations and having exhausted the conventional remedy of lower interest rates, the Bank of Japan launched Japan onto uncharted financial seas. If cutting interest rates to 0% didn't jump-start Japan's economy, maybe flooding the economy with money would work. At the worst, it would at least prevent the collapse of banks and industrial companies struggling under the burden of loans made during the height of Japan's great real-estate bubble, which had since turned sour.
The Bank of Japan started to buy shares in troubled companies to keep the Japanese stock market from sliding even further. To keep the market for Japanese Treasury bonds functioning smoothly, the bank also bought government bonds. And in an effort to flood the financial markets with free money in the hope that somebody would borrow it if it was just cheap and plentiful enough, the Bank of Japan bought billions in short-term debt.
However, Japanese consumers and businesses that weren't interested in borrowing $1 of free money were just as uninterested in borrowing $2 in free money, it turned out.
So, if no one in Japan wanted to borrow all that free money the Bank of Japan was pumping into the economy, what happened to it?
It went overseas -- looking for higher returns.
Some was invested by Japanese savers, banks and investment companies. A favorite investment was the relatively high-yielding debt issued by the U.S. Treasury. Japanese holdings of U.S. Treasury debt climbed.
Some of the cash was borrowed in Japan by overseas investors who used the free money to buy U.S. Treasurys, gold and mortgage-backed securities, among other assets. This carry-trade, as it's called, is extremely profitable because access to free money means that investors can leverage their own cash with borrowed money to the tune of 5 or 10 or 20 to one.
So until BOJ raise interest rate the flood gates will remain open around the World.
But the The Bank of Japan two strategies which has been giving a fair advantage to Japanese companies are giving an unfair advantage to American companies.
Corn pulls other grains in steadily rising market
Grain prices are continuing their steady climb.
Corn, fueled by ethanol industry demand, strong exports and strong feeding demand, is leading the way and pulling wheat, soybean and grain sorghum prices up with it.
March futures for corn closed at $4.08 Wednesday on the Chicago Board of Trade, the highest level in a decade.
March wheat on the Kansas City Board of Trade traded above $5 for a while and settled at $4.98, up 6 cents, while Chicago soybeans closed at $7.22.
Grain prices have hit daily increase limits for four of the past five days of trading.
http://www.kansas.com/mld/
eagle/business/industries/
agriculture/16484579.htm
Dotcom frenzy is back, but it is call Ethanol.
The down size to Ethanol speculation is that it will lead to inflation in the wholesale food level.
Ethanol is powering more than just vehicles nowadays. It’s also the explosive force behind the rising grain markets.
Ethanol is key to the market rise as the current supply demand for corn is at 2.15 billion bushels. That’s expected to climb to over 3 billion bushels this year, said Kohli. He added that the demand might climb to 4 billion by 2008.
Considering that the entire 2006 crop has been estimated by the United States Department of Agriculture at 10.535 billion bushels, one quickly can see how much corn supply is being used up just to be burned up in vehicles.
However, that estimate by the USDA, according to Kohli, is also another reason why corn is starting to flirt with the $4 mark.
The high price of corn will cut into the feed usage by about 166 million bushels according to the USDA. Less corn to feed, less livestock to be fed, less pork, beef and chicken for the market.
Kohli observed as more corn is delivered for the energy market, “You’re going to be looking at higher prices in the grocery store.”
“The question it comes down to is this: food versus fuel. How necessary is ethanol? How necessary are chicken, pork and beef and eggs. You have a classic battle being set up between food and ethanol."
www.news-banner.com/index/
news-app/story.6055/
menu./sec./home.
Could inflation in wholesale food level jump in March?
Wheat Rises to 7-Week High as Europe's Growers May Win Exports
Wheat rose to a seven-week high in Paris as speculation reduced production in the U.S., the world's biggest exporter, signals more sales from the European Union, the world's third-largest shipper of the grain.
U.S. wheat production may drop as corn prices at a 10-year high spur production of corn at the expense of wheat. Wheat on the Chicago Board of Trade rose 5 percent Jan. 12 and wheat in Paris climbed 2.9 percent after the U.S. Department of Agriculture forecast the smallest global corn supplies in 29 years.
http://www.bloomberg.com/
apps/news?pid=20601081&sid
=aLUYVY6i0k7I&refer=
australia
Inflation in the wholesale food level could last to summer.
THOUGH last weekend's frigid temperatures are easing, their results will be felt at farmers markets and groceries for months. And while citrus and avocado growers were the hardest hit, many other fruit and vegetable crops were devastated as well.
Farmers from every agricultural region in Southern and Central California — from north San Diego County to the San Joaquin Valley and east to Temecula — report that this freeze was one of the most devastating to crops in the last 20 years, as icy Arctic air smothered the state for several days in a row. Growers say they've lost 50% or more of crops including strawberries; vegetables such as peas and celery; and lettuces, herbs and other tender greens. As a result, consumers can expect to see shortages of these for at least the next several weeks and maybe beyond.
Indeed, because the freeze affected some of the greenhouses where tomato and other vegetable plants are started, the effects of this freeze could ripple out through the early summer.
http://www.latimes.com/
features/food/la-fo-
storm17jan17,1,1454544.
story?coll=la-headlines-
food
Will the Freeze Bring Inflation in the Wholesale Food Level?
The freeze is the latest problem for the farmer. He is still recovering from losing family tomato seeds during last summers fruit fly scare.
"I lost it all," Pasquale said. "I lost all my, my dad Caesar brought from Italy, I lost those too. I'm sorry, I get emotional when I think about that."
Pasquale owns one of about 900 small farms in Fresno County. Most are smaller than 10 acres.
Another group of farmers is preparing for a big loss from the freeze. Of the 6200 farms in fresno county, 15% are small farms with less than 10 acres. Ag officials say while the farms are small, this group stands to lose big.
http://abclocal.go.com/
kfsn/story?section=
local&id=4935169
Rising inflation expectations could lead to higher wage demands
"Lingering inflation pressures and solid growth in production in the month of December will keep the Fed focused on inflation," said Drew Matus, senior financial economist at Lehman Brothers in New York.
Treasury prices moved to session lows after the Fed's latest Beige Book [nWAT006858] suggested that the economy was growing at a steady clip in late 2006 and early 2007 despite weakness in housing and auto sectors. The Fed's anecdotal account of business conditions across the nation observed that the economy expanded at a modest pace in December and early January, labor market conditions tightened.
California Faces $1 Billion Crop Loss
Schwarzenegger declared a state of emergency in California, giving local officials more access to funding and resources. As much as 75 percent of the orange crop was ruined, according to California's Department of Food and Agriculture, which oversees the state's $31.8 billion agricultural industry.
Most California citrus, sold as fresh produce, accounts for 30 percent of U.S. oranges, second to Florida. Lemon, grapefruit, avocado and strawberry growers also were hurt by the cold.
``The state is offering help,'' Schwarzenegger said. ``And we are also requesting help from the federal government.''
http://www.bloomberg.com/
apps/news?pid=20601203&sid
=aJewsnHmlEUU&refer=
insurance
Hey, a somewhat honest statement from a realtor!
"It's not so much prices are coming down, it's that prices should never have been there in the first place," said Craig Beggins, owner of a Century 21 franchise in southeast Hillsborough and Pinellas."
Prices are finally coming down in Tampa which is funny because a realtor we know there told us about 4 months ago that prices will never drop there because it is sooooo desireable that everyone wants to live in the greater Tampa area. Here's the article:
http://preview.tinyurl.com/2utoah
Stark and Staggering Testimony
50% of Gov. spending will go to Entitlements if the Gov. does not do something.
Ben Bernanke is giving a testimony on Capitol Hill to law makers, now on CNBC, and telling everyone to prepare to work into your golden years, taxes rates must be kept low by keeping entitlement low, and that the calm before the deficit storm is now.
Economic will weaken without a new budget and current policy is “Unsustainable”.
Fiscal strain must be addressed now by congress now because economic growth is not enough to fix the Weakened economic situation in the US.
Says the need to change economic objective was 10 years ago, and these fiscal imbalances are blooming, so each citizen must plan retirement, so their children can have a quality of life.
Entitlement programs are in his sights, Social Security, Retirement, Medicare (medical costs are growing at 1% a year faster than the economy is growing).
Extraordinary changes are needs or budget issues will be very large, very soon.
If we continue to borrow more from foreign lenders the growth of economy debt will be palatable. Social Security and pay roll taxes will not pay for the entitlement bills due, and Medicare poses a greater long term risk than Social Security.
Tax cuts do not pay for themselves.
Stark and Staggering Testimony (con’t)
Question form Bernie Saunders Vermont: Congress: Poverty increasing and gap between rich and poor is growing, top 1% of house holds get mammoth tax cuts, free trade is a disaster, lose of jobs and trade deficits must not be run up year after year. Manufacturing base collapsing. Can you comment.
Bernanke Answer;
I agree inequality is rising and has been for a long time, like Brazil. We need a good standard of living and the issue needs to be addressed and it would be interesting to think more about it.
The source of trade imbalance is we are investing more than we are saving, and the response to that is trying to reduce deficits, which is complicated.
Question form Bernie Saunders Vermont: 800 trillion dollar deficit is a concern.
Bernanke: it is not from trade polices, the industrial base in the US is NOT decaying, best IT, manufacturing is declining because it is more productive, not a trade issue. People must increase their savings.
Stark and Staggering Testimony (con’t)
Beranake: IRS must increase collection, improve budget, congress must pay for their Gov., so they need to determine the size of Gov. they want.
If tax rates are too high they can dry out the activity being taxed.
Balancing the level of taxes against level of spending with out dampening the economy.
Economy has recovered for the 2001 recession.
Existence of foreign lenders is good for USA in the short run, and must come down slowly over the long run.
Standard CPI inflation is not as accurate as CPI should be in that it should index Tax Code and Entitlements to see true inflation.
Stark and Staggering Testimony (con’t)
Senator: No saving in America puts pressure on Congress and makes it necessary to borrow Capitol from abroad. This causes security issues and could compromise our countries independence.
Beranake: Use Physiological principals, in that if people are told they have a 401 K at work and ask them if they want to put money in it they will say no, but if you just put the money into 401K and ask then to opt out they say no, leave the money in the savings.
IRA’s tax free money is controversial, so I suggest use psychological measures to make people save.
Also, spread knowledge to the public through National Literacy.
Sorry Keith,
GTG
Sorry for all of the typos and mistakes, I was typing as they spoke.
I know you readers are really strict about grammer and spelling.
Correction, The Senate was involved in the questioning of Ben Bernanke.
ALERT!!!! There is a WIDESPREAD misunderstanding WRT Chinese reserves, the trade imbalance, etc.
(1) Chinese US$ reserves have soared b/c US supranational firms have deposited billions of US$ in Chinese banks to fund their MASSIVE investment in Chinese production. That the Yuan is not covertible means that US firms require that the BOC hold US$ reserves against US firms' deposits. In effect, it is not "the Chinese" who hold US Treasuries and agency paper as reserves, it is indirectly US firms who own the US debt instruments. This same phenomenon occurred from the early '60s when US firms increased their Eurodollar deposits over time, prompting the Europeans to demand gold for US$'s, which in turn resulted in the US$ going off gold. When US firms need to repatriate deposits from China for various reasons, they merely swap Yuan deposits for Treasuries held as book entries with the member Chinese dealer banks via the BOC.
(2) The US trade imbalance with China is overwhelmingly the result of US firms investing $1 in Chinese production to get $8 of "exports" from China that return to the US as "imports". Adjusted for the "imports" from US subsidiaries in China, and taking out oil, the US trade deficit is barely 1-2% of GDP; negligible. With oil, the imbalance is 3-4%; however, 1% of that total is related to "imports" from production by large US oil companies abroad.
Then, account for the trade-weighted capital account surplus the US currently maintains, and there effectively IS NOT A US TRADE IMBALANCE.
(3) Chinese producers are required to purchase imported oil in US$. Part of the reserves held by the BOC is for the purpose of US$'s to buy oil and derivatives.
Apparently, few if any media pundits are smart enough to uncover and report these easily attainable facts. Or, the largest corporations who are the source of the perceived trade imbalance and soaring US$ reserves do not want the facts to be known for fear that that the public will demand policy changes to bring investment and employment back from the rest of their imperial/colonial client states.
Rather than a US$ collapse, as many or most expect, the US$ Index is likely to continue to firm, if not rise to the 100-105 level, and certainly rise in terms of stock, real estate, and commodities prices in the short to intermediate term. The US$ will firm or rise as Asia and the EU+ slow from slowing US growth and foreign investment. US$'s will be repatriated back home, increasing the risk of a hard landing, banking crisis, and outright deflation in China. The Shanghai stock index is now in a parabolic/asymptotic rise, which is a textbook bubble trajectory, and all bubbles burst/crash.
SELL CHINA.
This is more than a housing bubble, it is an economic meltdown:
Total value of US Assets: $46 trillion USD as of Jan 2007
Total value of US Debts, both public and private as of Jan 2007: $47.3 trillion USD
Net worth of USA: -$1.3 trillion USD in Jan 2007
How does this affect your geopolitics? I'd think that many would consider a more local approach to dealing with such an economic catastrophe. If you inflate the economy more, your debt will increase much more than your assets. The US economy is mostly buying and selling of "financial investments", i.e. MBS, home equity lines of credit, construction financing, and other "savvy" investments. Is it reasonable to assume such an economy can sustain itself ad-infinitum?
Also, a 3% drop on the average home translates into around $900 billion USD in 2006.
Xstate
The American public school system creates and is run by imbeciles. No wonder that this housing bubble is going to take all'em morons down.
To Anon 5:33
I'm actually WITH YOU on this. A quote from my original entry :
"I personally like to see initial asking - sell price...but those numbers are hard to come by and lag by 2+ months."
I don't have easy access to SoCal numbers, so let's talk about my market.
This is for Fairfax County, VA (the ever hot "DC area" - this is the largest county in VA) for December :
Average Sold Price:
2006 - $ 537,829
2005 - $ 559,668
- 3.90 %
Median Sold Price:
2006 - $ 450,000
2005 - $ 484,144
- 7.05 %
Total Units Sold:
2006 - 1,223
2005 - 1,621
- 24.55 %
Average Days on Market:
2006 - 97
2005 - 38
155.26 %
NOW HERE IS THE CLINCHER :
Average List Price for Solds:
2006 - $ 575,194
2005 - $ 578,751
- 0.61 %
So the list price is only down $3,500, yet the sell prices vary by over $20K? Almost $35K if you look at the median price?
THESE are the real numbers that I look at. Wanna see DC? Again, this is for December :
Average Sold Price:
2006 - $ 505,792
2005 - $ 581,613
- 13.04 %
Median Sold Price:
2006 - $ 388,250
2005 - $ 400,000
- 2.94 %
Total Units Sold:
2006 - 594
2006 - 697
- 14.78 %
Average Days on Market:
2006 - 69
2005 - 36
91.67 %
Average List Price for Solds:
2006 - $ 538,175
2005 - $ 607,724
- 11.44 %
OUCH! Listing prices down 11.4% and actual sales down 13%! Asking in 2005 was $607K and it got $582K. Asking in 2006 was $538K and it got $506K. That's $25K down, then another $32K down in 2006 for a total drop of $57,000.
One more. This combines all the northern virginia counties for Dec :
Average Sold Price:
2006 - $ 536,710
2005 - $ 552,621
- 2.88 %
Median Sold Price:
2006 - $ 451,750
2005 - $ 479,000
- 5.69 %
Total Units Sold:
2006 - 1,710
2005 - 2,131
- 19.76 %
Average Days on Market:
2006 - 91
2005 - 38
139.47 %
Average List Price for Solds:
2006 - $ 573,779
2005 - $ 571,845
0.34 %
This is all sourced here :
http://www.mris.com/reports/stats
You state "And in SoCal, in NY, in Seattle and in a host of other cities, selling price YOY is positive."
Can you show numbers? I'm not trying to be combative, I honestly want to see the stats! I could believe a YOY gain in NYC as there is simply no land.
A solution to this problem:
how about doing something different...lets all make a difference as ONE for ALL the economically unsophisticated that are waiting in line to be victimized. the talent pool is in all our blogs!!! i found an unconventional way of getting these causative agents to ground level so they can see what they have done. i call it the iPSS system. or the interactive problem solving system: I derived this from 42 USC SEC 3614-1. Whereby a third party is utilized to confirm the existence of an error and when discovered, rectified or immediate action taken to achieve resolution by the party that originated such error. And results are brought out not by the originating party but that of the recipient of that corrected error.
This is how it works:
we all see the existence of all these erroneous transactions instead of talking about it lets place all of them in one centralized area:
- substantiated with documents sans personal info of borrower
-with a section for anyone and everyones inputs. complete with all the cool tools and education materials for the borrower to understand and learn the process
- verifications, rebuttals, calculations, comments, suggestions all posted for the perpetrator to see treatment options.
Now here is where the fun begins!!! If he/she does not correct that error every single person that knows or will know this scumbag will be dutifully informed for the sole purpose of public safety and awareness.
Does it work?
Well, whoever I ticked off at this point shall already have called their misrepresented client with a solution quicker than a reply from a qualified written request.
And to top off it's FREE to the victim who we all know have nothing.
Alls well that ends well right? Wrong because now A public apology to all concerned is now needed from the perpetrator. Not only does he have to fix the problem BUT also apologize and not do it again. How can he? in fact he will now be an excellent asset to our cause.
These peole are not BAD, only misguided. Imagine if we get more and more or these "experts" in causing our Economy to absorb Billions of Dollars in Mortgage Fraud and Predatory Lending.
Blogs like ours will be a totally different subject matter.
God bless all of you who he has gifted and has not buried, instead used those blessings for the betterment of our neighbors wellbeing.
the prototype is in my website.
Derivatives Blowup -
from bloomberg
http://tinyurl.com/2b2n37
SallyMae, SLM Corp., the nation's largest provider of college-student loans, said fourth-quarter profit tumbled 96 percent because of a decline in the value of financial contracts it uses to protect against swings in interest rates.
...
Sallie Mae had a loss of $244.5 million related to derivatives and hedges, compared with a gain of $70.2 million in the prior year.
...
And the next shoe to fall for last quarter will be..
From the same article:
----------------
...Freddie Mac, a mortgage finance company that also uses derivatives, said this month it had an undetermined loss last quarter because the value of its hedges declined as rates fell.
.....
----------------
It seems they got that sudden dump in interest rates last Dec.( down to 4.42% remember) wrong.. Hmm.. ne ful wd noe that interest rates were headed downwards.. And, anyway that's what a hedge, a derivative is for - as insurance. ya mean, your derivative didn't protect ya ? Hmm... calling Durex won't help. you didn't realize its only 88% effective ? you thought it was risk-free ? you errr.. didn't leverage it up did ya ? nahhh you wouldn't have.. would you ?
I love to see these mathematical and statistical philosophy ignorants be taken down a peg or two - hell, who cares about math smarts - just simple humility would have kept them out of trouble. On that desert island that they get exiled to, the book allowed should be
"Fooled By Randomness" - Nassim Taleb
http://www.fooledbyrandomness.com/
-K
Keith: Huge four building condo construction fire in Escondido, California. "Cause unknown."
But HPers will suspect motive...
http://www.foxnews.com/story/0,2933,244718,00.html
Whether tragic events touch your family personally or are brought into your home via newspapers and television, you can help children cope with the anxiety that violence, death, and disasters can cause.
Listening and talking to children about their concerns can reassure them that they will be safe. Start by encouraging them to discuss how they have been affected by what is happening around them. Even young children may have specific questions about tragedies. Children react to stress at their own developmental level.
The Caring for Every Child's Mental Health Campaign offers these pointers for parents and other caregivers:
* Encourage children to ask questions. Listen to what they say. Provide comfort and assurance that address their specific fears. It's okay to admit you can't answer all of their questions.
* Talk on their level. Communicate with your children in a way they can understand. Don't get too technical or complicated.
* Find out what frightens them. Encourage your children to talk about fears they may have. They may worry that someone will harm them at school or that someone will try to hurt you.
* Focus on the positive. Reinforce the fact that most people are kind and caring. Remind your child of the heroic actions taken by ordinary people to help victims of tragedy.
* Pay attention. Your children's play and drawings may give you a glimpse into their questions or concerns. Ask them to tell you what is going on in the game or the picture. It's an opportunity to clarify any misconceptions, answer questions, and give reassurance.
* Develop a plan. Establish a family emergency plan for the future, such as a meeting place where everyone should gather if something unexpected happens in your family or neighborhood. It can help you and your children feel safer.
If you are concerned about your child's reaction to stress or trauma, call your physician or a community mental health center.
One in 51 homes in Palm Beach County was in some stage of foreclosure in 2006 as rising interest rates on adjustable mortgages and plunging home sales combined to push homeowners into default, according to a RealtyTrac report released today.
www.palmbeachpost.com/
business/content/business/
epaper/2007/01/18/
0118foreclosures.html
?imw=Y
Ricky DiBernardo, 44, of Lido Beach was arrested at home yesterday by the Nassau County Police Department for allegedly accepting State Medicaid benefits from July 2004 to March 2006, despite having means that disqualified him several times over.
“This case came to the attention of the Social Services Department under the Medicaid Czar Nicole Watkins, who we hired last year, when our investigators acquired information that this individual owned and was driving a Hummer and was receiving Medicaid benefits,” Mr. Suozzi said at a press conference today. “That caused them to subpoena different records – including bank records, American Express records, his mortgage application – where we found out that he had these assets of over $400,000 cash, a new home, as well as an income of $150,000 a year.”
Mr. DiBernardo’s ownership of a Hummer was discovered during a routine background check. Investigators then discovered that he had put over $200,000 in cash down on his new $666,663 home and that his monthly income was listed on his mortgage application as $12,500 a month, Mr. Suozzi said.
This information was in sharp contrast to information allegedly provided by Mr. DiBernardo on a Medicaid application.
http://www.northender.com/
northend_news_details.
jsp?id=779
First Franklin MBS Classes Downgraded
Two classes of First Franklin Financial Corp. residential mortgage-backed certificates have been downgraded by Fitch Ratings, and three classes have been placed on Rating Watch Negative.
Class M-8 of series 2004-FFH1 was downgraded from BBB to BB, and class M-9 was downgraded from BBB-minus to BB-minus. Class M-7 of the series and classes B-1 and B-2 of series 2004-FFH2 were placed on Rating Watch Negative.
In addition, Fitch affirmed the ratings on 16 classes from the two transactions. The negative rating actions were attributed to a deteriorating relationship between credit enhancement and expected losses.
The collateral for the transactions consists of first-lien subprime loans.
http://www.fitchratings.com
Meritage MBS Classes Downgraded
Two classes of Meritage Mortgage Loan Trust series 2004-1 have been downgraded by Fitch Ratings, and two other classes have been placed on Rating Watch Negative.
Class M-8 was downgraded from BBB-minus to BB-minus, and class B-1 was downgraded from BB-plus to B-plus. Classes M-6 and M-7 were placed on Rating Watch Negative.
Fitch said the negative rating actions were due to a deteriorating relationship between losses and excess spread that is likely to prevent overcollateralization from maintaining its target amount.
ABSC Classes Downgraded
Two classes of Asset-Backed Securities Corp. Long Beach Home Equity Trust mortgage pass-through certificates have been downgraded by Fitch Ratings.
Class M2V of series 2000-LB1 group 2 was downgraded from BB-plus to BB, and class BV was downgraded from CC/DR4 to C/DR5.
In addition, Fitch affirmed the ratings on five classes of group 1 in the transaction.
The rating agency attributed the downgrades to continued deterioration in the relationship between credit enhancement and loss expectations.
The subprime mortgage loans underlying the transaction were acquired by ABSC from Long Beach Mortgage.
Pulte Homes expects fourth-quarter earnings results sharply below its previous guidance, as new home demand is "still far below pre-2006 levels."
http://www.thestreet.com/
newsanalysis/
homebuildersconstruction/
10333388.html
There are these so called "artist’s lofts" condos starting at $800,000.00+ Plus HOA does here in El Segundo. Bill Ruane (pronounced "ruin") is the Realtor. These are located at 1225 East Grand, El Segundo, CA 90245. They are less than ½ mile from the sights sounds and smells of:
1) LAX (24/7 noise/shaking walls.)
2) Boc Gases. They synthesize Xenon, Krypton, Neon and You DON’T even want to know what else. Take a deep breath.
3) Chevron Oil refinery. I love artificial clouds. Nothing like the smell of burnt tar from your friendly neighborhood smokestacks.
4) LA Sewage treatment plant. How many people live in Los Angeles again?
This is just the start. Your “backyard” is next to a Metal Grinder company. Buzz. Buzz. Grind. Alarm clocks are so overrated.
Really cramped weird layout. No view up to the 2nd of third floors. Fake oriental interior with Granite counter tops and cheesy 1970’s “new” living room style.
But there is no loft at all in this loft. JUST A MISSING WALL between the garage and my new living room "office". When I said I wanted a wall in the garage and they said:
"The missing wall in the garage is what makes it a loft”
Huh? A missing wall in the garage is a loft? Go figure. Well I want a wall in the garage. To this they shrugged their shoulders and said:
"Well you can always change it." and “You can install the wall yourself”.
Whoa! Why would anyone grossly over pay for this white elephant in the first place AND THEN would have to make an instant expensive installation change? The arrogance to even suggest such a thing. I guess if you have to ask then you can’t afford it.
Basically these lofts are beyond a complete joke. Even at half the price. They have a huge SOLD sign outside of one of these units. So you better snatch the rest. These lofts are hot. Oh by the way - guess what?
IT HAS NOT EVEN BEEN SOLD.
That’s right. False advertising 101 anyone?
Out at the Peak is right.
The Escondido condo fire is a wee bit suspicious.
Four of the five buildings at the partially completed condo complex were destroyed. I guess they'll have to go back to finish off the fifth building later.
Will China suffer from a global real estate bubble in 2007?
One might remember that we had three major real estate bubbles in the past century.
In 1926 the U.S. real estate bubble shattered and indirectly caused the world economic crisis in the 1930s.
In 1991 Japan's had a real estate bubble which resulted in a 15-years long economic slump.
In 1997 Hong Kong (Southeast Asia) had its largest real estate bubble
Global housing bubble is rarely seen in history, but the last time the real estate markets had a global real estate bubble was in 1956.
http://news.soufun.com/
2007-01-03/912917.htm
I keep waiting for the "bubble" to burst. Despite all the comments indicating that it's *on its way* or is *just starting*, I still don't see the prices actually dropping in any area more than a few single-digit percentages. If we are still living in the bubble, it's got a heck of a tough skin.
I think waiting for the bubble to collapse is like trying to time the stock market; you either want a home or you don't. If you do, buy what you can afford. If you don't, rent and invest any money you have left over for that big downpayment that you need in order to avoid a high leverage mortgage.
A very
interesting observation from Paul Krugman of the
NY Times...
Well you certainly can predict failure when you purchase beyond your means.
Thanks society for screwing up the housing market so badly.
Here is a prime example of what contributes to people getting in over there heads when they get brainwashed into believing that 150,000 homes are considered "starer homes"
BTW, my first "starter" was a 38,000 brand new with 5,000 down in 1983.
Here is a excellent example of the crazy bubble that we have witnessed.
This home SE GENOA ST Port Saint Lucie FL which sold used for 42,000 in 1987 sold again for 57,000 in 2001. This 14 year period saw an appreciation of 15,000 (1071.00 per year)
Also, was this really an appreciation or did the prices of homes decline between 1983-1987? As the office of the property appraiser in St. Lucie Country shows this home sold brand new in 1983 for 71,400. (Not sure if they could make mistakes on their data entry or not.)
Jumping ahead now, this home is now listed (as a starter home) at 157,900. So from 2001-2006 this home saw a appreciation of 100,900 ( 20,180 per year) compared to all of the 14 years prior to this of 1071.00 per year.
Appalling, simply appalling to me, also, when did society in general get brainwashed into believing that starter homes are worth 157,900? Five years ago a starter home would be around 50,000 am I wrong?
For me I have yet to spend 157,900 on a home. My biggest purchase was my last home (1500 sq feet with basement) which I sold at a loss in 1998 for 134,500 (paid 136,400 two years earlier) of course that same type of home is now selling for 250,000.
SKB
This is ridiculous. All of you are just bitter and upset. You want the price to fall because you refused to buy when you had the chance. That was your fault. If you have a problem with our new prices here then there are still affordable houses in the Midwest. So please stop spreading your disinformation campaign against Real Estate.
Allot of things have changed since "1984". There is no place left to build in Los Angeles. That is a fact. Space is at a premium and everyone wants to live here. That will not change any time soon. There will be a slight correction sure. We have already seen 2-5% and perhaps it could go higher but overall prices have stabilized. If anything now is the time to buy because we have low interest rates and better selection.
If there is a burst it will be short lived and only because of negative people like you. Stop wishing the worst on everyone. Nobody is creating new land in Los Angeles. Did any one you mention the wonderful tax breaks and the strong local economy in Los Angeles? I didn’t think so. And none of you have even considered the effects of amnesty for the undocumented Mexican workers here. LA has the largest population of Mexican immigrants. This will force prices up even more.
You are all just jealous because you did not buy when you had the chance. People have always said the same thing and overall it is rare and short lived. There have always been obscure drops but they quickly rebounded because Real Estate goes up. Wake up and take some responsibility for yourselves!
to the last anon, you must not be a reader. a lot of us sold at the peak and happily, gleefully rent.
'bitter'? try "overjoyed"
Should this property be Siezed by the Federal Government?
Authorities believe that methamphetamine manufactured by gangs in Mexico and transported to the Bay Area by illegal immigrants is being sold on several units in a complex of run-down bungalows and duplexes at 329 S. Willard Ave. that has a history of drug activity
"It's cheap. It's easy to manufacture. It's an epidemic," according to Santa Clara County Sheriff Laurie Smith, who was present early this morning at the raid site.
Authorities believe that methamphetamine manufactured by gangs in Mexico and transported to the Bay Area by illegal immigrants is being sold in the complex.
"It's cheap. It's easy to manufacture. It's an epidemic," according to Santa Clara County Sheriff Laurie Smith, who was present early this morning at the raid site.
http://www.nbc11.com/news/
10784404/detail.html
Fremont Investment & Loan has laid off 50 people involved in residential home loans from its Tampa office, which could set the stage for more cutbacks in industries that serve a housing market now trying to correct itself.
The senior VP based in Brea, Calif. said if the blame is going to be directed anywhere, it's being placed squarely on the slipping housing market.
The business has shrunk, and those people obviously weren't being utilized, he said. For the residential housing market business, this is a slow period.
It's not only the rising interest rates, but the insurance as well, so the market is slow as a result. Hillsborough County has seen a drop in building permits over the last year, a decline that reached as high as 30 percent.
Most of the people let go in the recent round of layoffs were part of the support staff of underwriters and other assistants who serve both the inside and outside loan sales forces of Fremont.
http://tampabay.bizjournals
.com/tampabay/stories/2007/
01/15/story2.html
I just Sold a couple of months ago and was looking to buy a new house.
After looking around and noticing all those empty listings and the prices people were asking fo tear downs, I started to get uncomfortable.
If you have a nice house in a great location, it should be priced at a premium. Unfortunately there is a lot of junk out there that people think they can ask the world for.
Not to mention all the trouble that is starting to surface with bad loans. Plus the large increase in listings....basic Supply and Demand.
I could go on, but it's so obvious that there is a problem with the market that I don't need to.
The“Real Estate Bubble” is in fact a “Power Bubble” in Miniature
Have local governments been contributing to the large real estate bubble by producing non-rational risk for low income borrowers who have been persuaded into purchasing a home in the belief that the growth in recent housing price was due to increasing population and a scarcity of land.
Is there really a scarcity of land resource or has it been manipulated by local government.
http://news.xinhuanet.com/
house/2007-01/17/
content_5616004.htm
Some could look at places like San Francisco and said yes in some cities there are a scarcity of land, yet just last year developers have been able to build many high density new homes in San Francisco when in the past local government said there was no more land for new homes to be developed on.
The economy is control by fear and greed and when local governments manipulate resource so too can resource manipulate local government.
Seems like allot of fires being reported lately on new high density development.
Maybe this 4 alarm fire will end up being ruled accidental like the 5 Alarm fire that happened two weeks ago in Santa Clara.
The four-alarm blaze at Escondido Boulevard and Woodward Avenue started shortly before 2 p.m. Thursday, according to the Escondido Fire Department.
The gutted project was to feature 122 condominiums selling for roughly $400,000 to $450,000 each.
http://www.10news.com/
news/10793374/detail.html
The five-alarm blaze brought firefighters from six surrounding cities to the 430-unit complex near De La Cruz Boulevard and Montague Expressway. The fire was first reported around 2 p.m. and firefighters had the blaze under control by 3:45 p.m.
http://kcbs.com/pages/
166571.php?contentType=
4&contentId=277376
Condo prices reveal housing trends
Comparing condo prices may be the best way to gauge the direction of housing prices.
In trying to get a read on how much real estate markets are slumping, some people may be looking at the wrong indicator.
Condo prices not only dropped more steeply, 2.1 percent, but 46 percent of markets showed declines.
Which gives a truer picture? Adam Koval, a former investment banker who now runs SocketSite.com, which covers San Francisco's real estate market, insists condos are the way to go.
"Look at the same building six or eight months after the first sales were made," he says. "The prices then will be a pretty good indicator of what's going on."
The reason: It's an apples-to-apples comparison. With condos, there's, "no adding floor space or big improvements," says Koval. If you see a price change, it's usually pure appreciation - or depreciation.
Chief economist for the Mortgage Bankers Association, Doug Duncan, says there are several reasons why condo prices are more accurate.
"A smaller percentage of people who own condos occupy them; many are bought as second homes and for investment purposes," he says. "There's less friction in that market; it's more liquid."
More condo sellers react to market changes and act quicker than owners of single family homes, who tend to hang onto property in the face of lower prices.
Single-family house owners act like buy-and-hold value stock investors, riding out market peaks and valleys. They sell when they go through a life change - raising a family, retiring or moving for a new job, for example.
Condo owners act more like growth stock investors, who bet on the hottest companies and trade in and out of stocks much more often, reacting to what they perceive is happening in the market.
http://money.cnn.com/2007/
01/18/real_estate/
condo_prices_reveal_trends/
?postversion=2007011812
Has anyone done this type of analysis for any US markets?
Trend of housing Starts and Completions from Jan 1985bto Jan 2007.
http://photos1.blogger.com/
photoInclude/x/blogger/2825
/754/1600/337054/
HCS1206long.jpg
I won't worry too much about the hipe on the "housing bubble". Mortgage rates are at historical lows and the economy is doing well. According to the stats of my hometown in Texas on TheBubbleBuster.com I'm actually doing pretty well. I believe what it says about the micromarkets and each city steering its own course.
This is a funny one. You can't make this stuff up:
http://www.naplesnews.com/news/2007/jan/20/realtors_board_wont_send_numbers_state/?local_news
Home sales in Kern County were down 30 percent in December from the same month a year earlier, while foreclosures increased 37 percent during the same period, according to reports released Wednesday.
The numbers appear to be the latest sign of a home market downturn.
"It is a normal correction. What is abnormal about it is the size of the correction," said Steve Cochrane, the senior managing director of Moody's Economy.com, who has studied the local real estate market. "It was to be expected, but the longer the boom lasted, the steeper the downside."
Moody's Economy.com predicts that home prices in Bakersfield will decline 5.5 percent in 2007 and 6.6 percent in 2008. Business 2.0 magazine recently listed Bakersfield as one of 10 housing markets in the nation "ready for a fall," using some of the numbers compiled by Moody's Economy.com.
http://www.reedconstruction
data.com/index.asp?
layout=articleXml&xmlId=560
191299
Affordable housing provided one woman an opportunity, but she was unprepared for the reality
The studio in the luxuriously renovated historic building was valued at $300,000, but as a BMR unit, its price would be around $233,000. With her 10 percent down, she easily qualified for the $800 mortgage and $355 homeowners association fee.
When she visited the unfinished, 450-square-foot studio with sandblasted brick walls and exposed industrial windows, she felt daunted. "I thought, 'What am I doing? How am I going to fit in here?'" Still, caught up in lotto fever, she embraced her lucky break. Ridding herself of her furniture and selling her truck, she ordered a custom-designed Murphy bed and moved in.
Two years later, her dream of homeownership has turned into a complicated morass of unpaid bills and anxiety. Last year, she was slapped with a $4,000 assessment (an extra fee) for unforeseen building maintenance. She gave up her treasured Giants season tickets and sent the homeowners association a partial payment with a letter explaining that she didn't have the $4,000 immediately available. For the next nine months she received notices from the HOA that she was accruing $300 per month in late fees.
Eventually, the HOA dismissed the late fees and put her on a payment plan, but soon another issue arose. In December, just before undergoing surgery for breast cancer, she learned that the monthly homeowners association fees would jump to $630 a month to cover various building expenses. "We have never met our budget," she said. "We're always owing money and we don't have reserves built up."
Indeed, the Mayor's Office of Housing told me that the lawyers for the homeowner association are seeking restitution from the developers. "Homeowner dues are expected to rise," explained Myrna Melgar who administrates the inclusionary-housing program, "But not by 50% in two years." (The Landmark Union's lawyer was not available for comment by publication.)
But Hernandez's story underscores just how complicated creating affordable homeownership can be -- not only at the level of building and financing but also in education and culture. When she first learned of her new dues she contacted the Mayor's Office of Housing and asked for help in paying the increased homeowner fees. When told that this was not part of their role, she went in search of lawyers who might take her case. When no one accepted, she began to worry she might lose her home. If she couldn't pay the extra dues, her homeowners association could put a lien against her condo, which could eventually lead to foreclosure.
She contacted the Mayor's Office of Housing to inquire about reselling her unit, but when she learned that the value of her studio had somewhat declined, she worried that after real estate agent fees, she might lose her down payment altogether.
http://www.sfgate.com/
cgi-bin/article.cgi?
f=/g/a/2007/01/19/
carollloyd.DTL&feed=
rss.surrealestate
China ends key meeting with call to explore use of forex reserves
Chinese Premier Wen Jiabao said Saturday that China should ''explore and expand'' the use of the country's huge foreign exchange reserves, as a key financial conference wrapped up its two-day meeting.
http://home.kyodo.co.jp/
modules/fstStory/index.php?
storyid=294297
Fixed-mortgage rates are expected to rise to about 6.5% by the end of 2007, and sales of both new and existing homes are expected to slide this year, the Mortgage Bankers Association said Tuesday
www.realestatejournal.com/
buysell/markettrends/
20070119-schroeder1.html
Well, a friend in Portland listed their house in December for $450,000 and sold it this week (closed). I was shocked. I've seen an uptick in traffic around my area in Austin. We just listed our house this morning and had two visits already and one couple has scheduled a third visit. The spec homes across the street have had non-stop traffic all day and we didn't have an open house because of the drizzle and cold and thought it would have been a waste of time. With the traffic across the street it would have been a good day!
I think things are mimicking Australia and Britain after thier brief respite from accelerating price rises. The calm before the storm? Maybe people are rushing in while rates are still low?
I've been working with a realtor friend (of fifteen years) in Phoenix and who I bought and sold several homes through and so far can't find any bargains. The homes in some areas that use to cost $54,000 in 1995 are still selling for $350,000 and they are under 1200 sq ft! Please...where is the meltdown in Phoenix? There are some discounts on spec home by builders way out but even those discounts and upgrades make those homes more expensive than in 2004...no bargains. I did see one that raised my eyebrow, 3800 sq ft on 1.1 acre out toward Queen Creek (too far out for me) for only $380,000, which seems cheap by the central city standards.
Seeing this same trend in your area?
After the stock bubble crash you think people would learn never again to overpay for anything..
At least you can dump a stock in 10 seconds if the price goes against you. That woman with breast cancer who is stuck with her condo probably will get other forms of cancer soon brought on by stress. It is all so sad really.
FLASH: Mortgage rates are rising, hence fencesitters rushing into the market.
"To the Anon that posted that housing is up 3% in southern california. What is your definition of southern california? From what I have read at housing-watch.com, they are down. What gives?"
Anon is deluding himself. I think the Anon's who post really angry comments on this and other bubble blogs are likely leveraged up the ass, praying for the turn around, and grab onto any "good" news they can. The median might be up overall for So Cal - but you have to factor in the massive incentives being offered in new homes - they artifically inflate the median. Some of these incentives are worth over 100K now. People are getting more for their money - so it gives the false impression that everything is going up. Granted there are strong neighborhoods - but if you look at cities that started on the crazy spiral upward before Los Angeles, you can see the writing on the wall (i.e., San Diego). These anons who are so angry probably won't drop back in here in another year or two when they have 9 years left before the bankruptcy comes off their credit reports.
After figuring in tax deductions, insurance, and property taxes I'm ahead about 4K a month renting vs. buying right now (3 br, 2 ba in Culver City). If housing appreciates at 5% a year on average over a 10 year period while I invest my 4K savings a month even conservatively, I come out ahead. I have almost no debt other than a student loan and very low car payment (unlike the FBs who did HELOCs to buy Jaguars etc.) I don't lose sleep wondering if I'm gonna end up with a 900K mortage on a 700K house.
FYI - Great buy v rent calculator here:
http://www.dinkytown.net/java/MortgageRentvsBuy.html
Subprime shakeup continues - the lenders who created the bubble are trailing smoke. Latest to go: Funding America.
"There is no place left to build in Los Angeles. That is a fact. Space is at a premium and everyone wants to live here..We have already seen 2-5% and perhaps it could go higher but overall prices have stabilized. If anything now is the time to buy because we have low interest rates and better selection....Did any one you mention the wonderful tax breaks and the strong local economy in Los Angeles? I didn’t think so. And none of you have even considered the effects of amnesty for the undocumented Mexican workers here. LA has the largest population of Mexican immigrants. This will force prices up even more."
There is no place to build in los angeles? There are 7,000+ condos going up in dwtn LA, 20,000+ throughout rest of county. Condo prices are falling fast in LA county due to an upcoming condo glut! There is a hugh amt of selling of overappraised innercity LA properties to Immigrants thru 100%, no doc,stated,neg am, i/o, option arms, ect. The illegals are overpaying for properties in gang-infested Scentral LA slumzones thru fraudulent appraisals and possible fraud kickback schemes, which has indeed resulted in 10-30% yoy increases in some of the most rundown LA ghetto zones. The Lenders/SBA are getting screwed throwing money into scentral LA slums, and as soon as this toxic subprime spigot is shut down, there wiil be tons of foreclosed reo properties scattered all over inner LA like gang bullets flying in a Scentral hood.
The only effects of having massive amts of immmgrants here in LA is to turn 1/2 of the metro region into a third-world tijuana crapzone. Last Re downturn 1989-1996 LA prices fell average 35%. Parts of the Westside lost 50% or more in RE values.
LA county will drop 30% or more in value over next 3-5 years. Lots of LA zips, including some high-end areas, have already seen 10-30 % or more negative yoy declines. Look it up in Dataquick LA county Dec sales table.
A big week for grain and oilseed exports
The United States Department of Agriculture reports that corn, soybean, soybean meal and wheat export sales, for the week ending January 11, 2007, were above pre-report expectations. The report is viewed as bullish, with beans, corn and wheat above what's needed weekly to meet the Ag Department's annual projections.
Soybeans came out at 1,095,800 tons (40.3 million bushels), 86% over the week ending January 4 and 62% above the four-week average. Analysts were expecting sales of 500,000 to 700,000 tons. The main buyers were China (454,100 tons)
Soybean oil came out at 15,500 tons, compared to expectations for 5,000 to 15,000 tons. The main purchasers were China (25,000 tons)
www.brownfieldnetwork.com/
gestalt/go.cfm?
objectid=3B3A9279-CF0A-
21F0-F65CCA02BB2BA91E
Since US farmers are subsidized by the US government it seems that the price of grain could go up allot higher if it was not subsidized.
With China having a problem controlling grain price in their country, it seems like China’s Premier Wen Jiabao will get a very good bargain using some of its $1.07 trillion in foreign exchange reserves to stock up on US subsidized grain before grain price continue to climb.
If Premier Wen Jiabao is serious about actively exploring and expanding channels and modes then stocking up on US grain would be the best bang for the buck.
Plus if Premier Wen Jiabao imports cheaper US grain to drive down grain price in China Wen Jiabao can get more people working in the factors instead of the farms.
With the subprime lenders exiting the marketplace, so to goes the easy credit & money. Resale prices will fall. Down payments and proof of income will come back in vogue.
Uh oh.
Kick-*ss article in the Arizona Republic on mortgage fraud running rampant.
“In 2005, loose lending standards helped the mortgage industry post record profits and struggling buyers purchase a record number of homes, (and) also helped speculators and scam artists snap up Valley homes. The hyperdemand created by speculators played a major role in the rapid rise of Valley home values.”
The spotlight has gone on. The equity roaches will who suckled the teat dry are now scattering for the exits. Hmmm.... What's up with Greg Swann's blog these days?
REgarding previous anons comments about SCal median prices up 3.3% and LA prices 'stabilizing':
Here are some hi-end or solid middle class LA zips which have seen drastic yoy drops. sample must have at least 20 DEc sales per zip:
city zip #sfhsold medprice yoy%
Calabasas 91302 23 $990 -32.7%
Claremont 91711 25 $545 -13.1%
Glendale 91208 19 $775 -15.5%
Los Feliz 90027 18 $896 -23.6%
La Canada Flintridge 91011
20 $1,220 -15.4%
Pacific Palisades 90272 21 $1,550
-18.4%
Rancho P.V. 90275 37 $999 -14.2%
San Dimas 91773 20 $494 -13.7%
Studio City 91604 22 $946 -15.9%
These are some of the most highly desirable/exclusive areas of LA county, or at least solid middle class burgs. The significant yoy prices drops in these top-tier LA zip areas are leading indicators for a more generalized LA bubble decline down the road.The current +yoy% froth in the inner LA ghetto zips and communities is simply being stoked by massive toxic loans and widwspread mort overappraisal fraud which is to be expected in rundown, heavily immigrant minority slumzones where Gov't regulations have little or no control. The most ugliest slimiest, dirt poor illegal alien infested zip in LA, 90011, saw 23 SFH's sold @423,000, a +18 % yoy.
Note: Riverside and S bern county +yoy% readings due to majority of homes sold were New 4/3 stuccos in new tracts with massive builder incentives, carry back financing, ect which pushed av median sales prices up. THE IE will be hit the hardest of all the Scal counties due to the massive prevalence of toxic loans sold to first time buyers,including immigrant families. Look for foreclosure rates to skyrocket all over the IE like a fast-spreading cancer
Congress to Send Critics to Jail, Says Richard Viguerie
Congress Wants to Blame the Grassroots for Its Own Corruption
MANASSAS, Va., Jan. 16 /PRNewswire-USNewswire/ -- The following is a
statement by Richard A. Viguerie, Chairman of GrassrootsFreedom.com,
regarding legislation currently being considered by Congress to regulate
grassroots communications:
"In what sounds like a comedy sketch from Jon Stewart's Daily Show, but
isn't, the U. S. Senate would impose criminal penalties, even jail time, on
grassroots causes and citizens who criticize Congress.
"Section 220 of S. 1, the lobbying reform bill currently before the
Senate, would require grassroots causes, even bloggers, who communicate to
500 or more members of the public on policy matters, to register and report
quarterly to Congress the same as the big K Street lobbyists. Section 220
would amend existing lobbying reporting law by creating the most expansive
intrusion on First Amendment rights ever. For the first time in history,
critics of Congress will need to register and report with Congress itself.
"The bill would require reporting of 'paid efforts to stimulate
grassroots lobbying,' but defines 'paid' merely as communications to 500 or
more members of the public, with no other qualifiers.
"On January 9, the Senate passed Amendment 7 to S. 1, to create
criminal penalties, including up to one year in jail, if someone 'knowingly
and willingly fails to file or report.'
"That amendment was introduced by Senator David Vitter (R-LA). Senator
Vitter, however, is now a co-sponsor of Amendment 20 by Senator Robert
Bennett (R-UT) to remove Section 220 from the bill. Unless Amendment 20
succeeds, the Senate will have criminalized the exercise of First Amendment
rights. We'd be living under totalitarianism, not democracy.
"I started GrassrootsFreedom.com to fight efforts to silence the
grassroots. The website provides updates in the legislation and has a
petition to sign opposing Section 220.
"Thousands of nonprofit leaders, bloggers, and other citizens have
hammered the Senate with calls in opposition to Section 220, which seeks to
silence the grassroots. The criminal provisions will scare citizens into
silence.
"The legislation regulates small, legitimate nonprofits, bloggers, and
individuals, but creates loopholes for corporations, unions, and large
membership organizations that would be able to spend literally hundreds of
millions of dollars, yet not report.
"Congress is trying to blame the grassroots, which are American
citizens engaging in their First Amendment rights, for Washington's
internal corruption problems."
CONTACT: Mark Fitzgibbons, +1-703-392-7676 or +1-703-408-3775, for
GrassrootsFreedom.com.
SOURCE GrassrootsFreedom.com
Many posters to this site say there is not a bubble - yet they do not explain how this market can continue -
first time buyers - priced out of the market
ratio of income to cost of house = way out of balance
loss of jobs from builders and finance indurstry causing a ripple effect on economy = large increase in taxes to pay unemployment, welfare ect.
If housing increase every year 3-5% each year, reguardless of income, a average 3br house will be 600,700, 800 thousand? and still climb? What do you call inflation?
Can incomes rise to meet this cost?
Goverment costs due to rising retirement benifits for Goverment workers will continue to skyrocket, so taxes must climb to meet demand.
How?
Raise the cost of goods and service? But you are paying thousands a month for the house? plus the increase cost of goods.
We are way out wack in costs now, yet you say it will continue to climb and never go down, or go down a litte bit, only to keep rising in a never ending spiral?
You defy logic.
From Bloodhound and Greg Swans sight. They are really grasping at crumbs, imo.
Sure I’ll Show You That House - For A Hundred Fifty Bucks
By: Doug Quance
January 16th, 2007
Category: Real Estate
You gotta love how they do things in the New York / New Jersey area.
They don’t mess around.
I called a very experienced agent in the NY/NJ area yesterday to discuss her experience with one of her online service providers… as well as the usual real estate chit chat.
During our conversation, I asked her if she has had any experiences with the Redfin type of buyer brokers… you know, the kind that rebate money to the buyer.
According to her, the rebate is outlawed in New Jersey.
It’s the next item that just killed me (hence the title):
“Around here, if a buyer wants to see a house, they need to pay $150 and enter a buyer brokerage agreement. If and when they actually make a purchase, the $150 is given back to the buyer. It keeps the buyers from jumping from agent to agent,” she said.
Now that’s a shock. What a concept!
“And buyers go for it?” I asked, in disbelief.
“They have to. Everyone does it. It helps to compensate you for running around - and keeps you from dealing with buyers who aren’t serious. Show ten houses in a month, and you have $1500 to pay some of your expenses,” she replied.
I am not sure that I, as a seller, would approve of this…
I know you guys will have an opinion on this. :lol:
20 comments
Sacramento was one of the firts markets to correct and wil be used as a prognosticator for other previously "hot" markets realizing stabilization. Many Wall Street analysts are especially interested in the fortunes of Sacramento because of the high percentage of public builders comprising the new home market. So the mood of Sacramento will portend the national housing rhetoric and mood to come.
I believe that the Sacramento new home market bottomed at the end of 2006 and will show up in the resale numbers bottoming in the first half of 2007. My reasoning follows.
1. Starts - The lower new home starts are helping to quickly reach an equilibrium of supply and demand, and pricing stabilzation, so any news about low starts is good in my opinion.
2. Interest Rates - Rates are historiclly low and going lower. This will set up a similar situation as 2001 where housing led the economy by about six months into a recession, interest rates plummeted and then housing came back stronger than ever in spring 2002. This will happen in a more tame fashion Q4-07 or Q1-08.
3. Job growth. Though it may stall out temporarily in the first 6 months of 2007 don't panic. Sacramento job growth currently exceeds starts by a historically high margin that will lead to recovery from pent up demand. From 2000-2005 Sacramento had a SFD permits to job ratio of about 1:1 and the marketed moved along nicely because of three factors 1) Strong local job growth of 2:1 for the late 1990's 2)High job growth of the dot com and bay area 3)Falling interest rates. Those same factors are alligning again. Sacraemento had 23,000 jobs and only around 11,000 SFD permits in 2006, the bay area job engine is again heating up, and interest rates are low and will fall.
4. Pricing. New home pricing is a quicker prognisticator of market stability than lagging indicators of resale median pricing on closed homes. New home pricing stabilized at the end of the 4th quarter. Builders reversed the negative quarter over quarter trend in new home sales for the first time in two years per the recent Sac Bee article.
http://www.sacbee.com/142/story/106756.html
5. Resale Inventory. Sacramento resale inventory is down 30% since peaking in August. There will be some gain in inventory with the spring season, but and upward trend in sales should negate an increase in months of supply. Six months of inventory will indicate "balance".
How To: Disable Your Passport's RFID Chip
All passports issued by the US State Department after January 1 will have always-on radio frequency identification chips, making it easy for officials – and hackers – to grab your personal stats. Getting paranoid about strangers slurping up your identity? Here’s what you can do about it. But be careful – tampering with a passport is punishable by 25 years in prison. Not to mention the “special” customs search, with rubber gloves. Bon voyage!
1) RFID-tagged passports have a distinctive logo on the front cover; the chip is embedded in the back.
2) Sorry, “accidentally” leaving your passport in the jeans you just put in the washer won’t work. You’re more likely to ruin the passport itself than the chip.
3) Forget about nuking it in the microwave – the chip could burst into flames, leaving telltale scorch marks. Besides, have you ever smelled burnt passport?
4) The best approach? Hammer time. Hitting the chip with a blunt, hard object should disable it. A nonworking RFID doesn’t invalidate the passport, so you can still use it.
Hope the RE and Mortgage people are happy the despair,homelesness,mental and pysical health,drug and alcohol addiction,familys breaking up ,children in shelters and going hungry, they have helped create what a great commision they got to drive those nice shiny cars.
Maybe many in this buisness should spend some time in community service working in those shelters over the next few years to give back from the evil they have done.
phoenix:
01/01: 48,213
01/03: 48,621
01/05: 49,348
01/06: 49,614
01/09: 49,954
01/10: 50,152
01/14: 51,072
01/20: 51,671
Bob Windus has been trying to rent out his property in Santa Rosa but is having a tougher time than he expected. After trying to sell the home he turned to renting. "We're going to camp on it," he said. "I don't want to let it go while the market's in the pit," referring to the recent glut of houses on the market and the slump in sales.
Many never set out to own a rental home, but have become landlords out of necessity. Some are renting their homes to help make their mortgage payments until they find a buyer, while others have pulled their homes off the market until prices rebound.
The housing slump, combined with the traditional slowdown in home sales over winter, has led to a surge in the number of rental homes in Sonoma County.
Property managers said they are barraged with calls for help in finding tenants and managing properties. Other new landlords are trying to do it on their own.
Trent and Selena Phillips are seeking a tenant for the Windsor house they weren't able to sell despite cutting the price $90,000. The couple called it home until they bought a house in Vallejo more than a year ago, when Trent Phillips earned a promotion that requires him to commute to Alameda.
"We need to get a renter in there because right now I'm paying two mortgages. Every dollar I have coming in is going right back out the window," said Phillips, a Coast Guard chief warrant officer. "We're just barely holding on."
www1.pressdemocrat.com/apps
/pbcs.dll/article?
AID=/20070121/NEWS/
701210369/1036/
BUSINESS01&nocache=1
On the front page of the Herald Tribune today in a story they asked Latinos what they were going to do now that home construction was down 66 percent in Sarasota County. The answer: Go to other parts of the US that have work, take other jobs here, play soccer, bunk with other Latinos until construction improves. They said nothing about leaving the US. So if they move out of construction and into your career, what will you do about it?
http://tinyurl.com/2ck347
"no place left to build in Los Angeles."
Not making any more land, eh? How about high rise condos?
You should get out of LA more often. Not only does LA have have more land than any other major US city, you would discover that California has more land than almost any state, except Alaska and Texas.
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