April 20, 2007

FLASH: Foreclosures soar 800% in California vs. last year

800%

It's not often in life that you see "up 800%" type numbers.

Sometimes, you just have to put the paper down and look at that one in awe.

Up 800%.

Not 100%. Not 200%. Not 400%. Nope, up 800%.

Wow.

Foreclosure Surge in California

A surge of foreclosures in California has some economists concerned that the fallout will be long lasting and potentially wound the whole economy.

The 11,033 foreclosures in the first three months of the year represent an 800 percent increase over the same period a year earlier.

"For this rise in foreclosures to be happening in the midst of a strong labor market is truly unique and scary," says analyst Christopher Thornberg of Beacon Economics.

He predicts foreclosures will top out at four or five times the current level — enough, he says, to induce a recession or at least bring the economy to the precipice.

69 comments:

Anonymous said...

CA is bad.....other pockets of country bad, but in general, the US is good......see the market today?

Anonymous said...

WHAT!!!!

You have got to be kidding me, are there still people who say the market has bottomed out?

Phoenix Sucks said...

HAHA
Those idiots in SO CAL think they are immune. HAHA I think reality pricing is coming to a SO CAL city near you very soon.

Anonymous said...

yikes!!!!!!

Yikes!!! said...

Yikes!!!!!!

Anonymous said...

so what the DOW is close to 13,000!

whaooo

anonymous wimp said...

The stock market was at an all time high in early October, 1929, too. And in early October, 1987. Oh, yeah, and in late March, 2000.

Anyway, 800% rise in foreclosures in the world's top-ten economies (The state of California)? I'm sure everything will be ok. It won't lead to any problems. It's never been a better time to buy or sell or foreclose on a home.

Anonymous said...

If I take 100 grains of sand and increase it by 800%, as a % of all the sand in the world it's going from 0 to 0.

11,000 foreclosures in a state of 30,000,000 people is the same thing. It could double next month and still less than 1/10 of 1% of the population would be affected.

Anonymous said...

the market today and in the last few days, is reflecting the weakening dollar.

Anonymous said...

This is a number that will ultimateley be compounded. The more foreclosures you have, the lower the housing prices go, the more homeowners have homes worth less than their debt.

This is a catastrophic number for the future of California housing.

And the stock market is up today. Neville Chamberlain lives again in 2007.

starve_the_beast said...

Yesssss!

Anonymous said...

......see the market today?
-----
You poor soul.

You know, of course that US stocks are listed as priced in US dollars, do you not?

Do you also know that the US dollar is the midst of huge collapse?

Of course stocks cost more in US dollars. EVERYTHING costs more in US dollars.

It takes more US dollars to buy everything.

Everything.

Anonymous said...

you people make me laugh...
again there is no bubble and even if the prices go down it will not effect the country.
Look at the markets today, you losers missed out again.

Frank said...

WOOHOO!

That means I get to buy a house here in CA sooner than I was planning!!!

anonymous wimp said...

California real estate got especially crazy early last summer at the tippy-top of the bubble, right when I was considering a job in the Sacramento area. It was a great job, but I turned it down for many reasons, the chief among them being the outrageous cost of buying a home.
If there is any doubt in your mind that there are many, many foreclosures to come, or if you STILL think that Suzanne was telling the truth when she said that "real estate never goes down in price", check out the many fine California real estate blogs.
My personal favorite has been "Sacramento area flippers in trouble". It just gives the data, you infer the pain. Check it out, but careful: not for the weak of stomach:

http://flippersintrouble.blogspot.com/

Tom in Newport said...

Unfortunately big numbers like "up 800%" don't tell us much statistically in and of themselves. For instance, hypothetically, if there was only 1 foreclosure last year, and this year the numbers were "up 2,900%", there would still only be 29 total foreclosures. The "up 800%" doesn't give much detail, relatively speaking.

Anonymous said...

"the market" - Sometimes it can be very frustrating when people assume that all "markets" are tied together. There can be a crash is real estate without a crash in the stock market.

Anonymous said...

Just the fact that the MSM is surprised by this shows that they are morons.

Hayley said...

Lemme see, where's that ARM reset chart, unfortunately doesn't have late 06 on it so I can't compare, but May through November looks pretty nasty. In fact, with a three or four month lag next January its going start looking beyond ugly - 2000%, 20,000% who knows.

I hope Bernake holds firm, it'd be nice to see an adult making adult decisions in the US Gov't. You would think making people move out of houses they can't afford was akin to Guantanomo Bay detention.

As to the income distribution flag wavers on here, yeah it's a problem, but its not the problem. People who live in poverty also bear a lot of children into poverty.

And besides, if you live in the US you are already taking a hugely disproportionate amount of resources relative to the rest of the people on the planet (even if you are not rich.)

And I never see anyone who is ranting about income distribution selling their homes, building a hut off the grid and bicycling to work while they send what they would have spent on fuel oil to your sponsored family in Northern India.

I do see GE offering the family a low cost ultrasound so they can abort their female children, but that's a whole nother issue.

David said...

Bad has not even started yet either. It is going to be in the many 1000's% increase over last year. The train is coming down the tracks and fast!!!!

Markus Arelius said...

I told you so, Keith.
You guys keep ranting and raving about the carnage in Phoenix and Las Vegas - and for good reason. But pay attention to California, especially southern California, over the next 6 months. This is the market where realtors harp on and on how "everyone wants to live here" because of the weather and the glamour of "Orange County", totally disregarding the economic fundamental: residents in Orange County on average earn $75,000 per year. You CAN'T own a $500K home, let alone a $750K home on such an income. You just can't. You should be renting or leaving the state altogether.

Let me just close by saying the anon poster at 6:58PM is definitely a high on dope.

Anonymous said...

Why do the REALLY dumb people try to prove there's no housing crash by quoting what the Dow is at that day?

Anonymous said...

DOW goes down...HP says this is evidence of crash. DOW goes up, HP ays this is evidence of crash.

I love the consistent incosnistency of you knuckleheads.

Anonymous said...

Let me just close by saying the anon poster at 6:58PM is definitely a high on dope.

Well DUH, it is 4/20, what do you expect?

Anonymous said...

Foreclosures were up in Monterey Ca. last year when people were still dreaming of castles in the sky...

As for whomever said that who cares where California goes?...Brother California, Massachusetts, New York are your economy indicaters of where the country's economy is at...states in the south and part of the midwest are your welfare states...so we hold up the country with our tax dollars...so when you wish bad on other Americans it shows lack of class and shows that you want to bite the hand that feeds you...

Lots of treasonous bastards here bragging about how they don't care as long as they get their $$$ then leave the country...Karma is a force though and all I wish is for someday for you bitter jerks to understand what you wished for and to be ashamed but not find solice.

Oh and the DOW is crap...$$$ is being made but it's just paper which will soon be semi-worthless...

So don't stay too long in the water kids the high tide is coming...

Just check out the dollar vs. the Yen, Euro, Pound and even the fucking Canadian currency...that's just sad.

Anonymous said...

is there a site where you can see foreclosure information for free? i know foreclosure.com is there but they charge $$ and I'm a cheap SOB.

Anonymous said...

The DOW is up because it expects an interest rate cut and so does gold.

Poor Konrad said...

Cui bono?

Someone is profiting from this misery. That I can understand. What I don't get is why some people here get so much pleasure in others' suffering.

Anyway, this is systemic abuse. We don't deserve it. And when the masses of people find their illusions shattered, they will confront the world that required them to live in illusions.

FlyingMonkeyWarrior said...

one of his best rants yet, a must read, imo.
--------------------


by The Mogambo Guru
...............Larry Edelson at Moneyandmarkets.com says that if you allow for inflation, then, "the Dow has lost over 50% of its value since 2001, despite its recent gains. Put another way, if you bought all the stocks in the Dow Jones Industrials back in 2001, the purchasing power of your investment today would be less than half what it was back then."

But from this we get the immortal lesson in inflation that, "the Dow can rise, but you can actually be losing money all the while. It's simple…if the Dow goes up 10% but the value of the dollar falls 20%, you've lost 10% in terms of your money's purchasing power."

In terms of Mogambo Metrics (MM), you invest a pizza, but get back 9/10's of a pizza! Less than you invested! Hahaha!......

http://www.dailyreckoning.com/Writers/
Mogambo/DREssays/MG041807.html

Anonymous said...

Anonymous said...
you people make me laugh...
again there is no bubble and even if the prices go down it will not effect the country.
Look at the markets today, you losers missed out again.

+++++

You think you're getting "rich" on rising stocks that are priced in US dollar?

YOU'RE the loser for being so ignorant.

Anonymous said...

Must be a typo. The RE experts didn't mention that anything like this was going to happen.

Anonymous said...

Anonymous said...
"the market" - Sometimes it can be very frustrating when people assume that all "markets" are tied together. There can be a crash is real estate without a crash in the stock market.
____
Actually, the stock market is crashing. That's right, you read that correctly.

Price the stocks against the price of lead, gold, uranium silver...stocks are worth less and less even though they appear to be rising in price.

Remember, the price is shown in US DOLLARS, and the US Dollar is in full-blown crash mode.

Put that in your pipe and smoke it.

Anonymous said...

Shocked, shocked I say!

Anonymous said...

Anonymous said...
Why do the REALLY dumb people try to prove there's no housing crash by quoting what the Dow is at that day?
=====
Simple -- they see their already negative net worth becoming more negative, and are grasping at rising stock prices for comfort.

It's like dying of thirst in the desert, saying, "Look at all this sand to eat! I'm fine!"

Anonymous said...

Anonymous said...
DOW goes down...HP says this is evidence of crash. DOW goes up, HP ays this is evidence of crash.
******

The housing market IS crashing, not matter what the Dow is doing. It doesn't matter. The DJIA could go up a thousand points, and we've still got a crashing housing market.

In fact, if the DJIA does go up that much, you can bet there will be a corresponding further drop in the dollar. All the rising stock prices mean right now is that shares in decent companies cost you more dollars, because dollars are worth less and less as time goes on.

Wealth is rapidly being confiscated from Americans, and very very few understand what is going on.

You dingleberries who are trying to take comfort in a rising Dow will learn soon enough how very little material comfort you will be able to buy with your "gains".

Anonymous said...

Since the start of the year the dollar's gone from .77 to .74 against the Euro, a 3.8% decline in the dollar

The DOW is up 4.0% YTD.

NASDAQ is up 4.6%

S&P is up 4.66%

Overall you're still ahead in US equities.

Anonymous said...

I failt to see where this supposed high inflation is.

I don't keep track to the penny every expense I have but generally I spend about the same on things as I did a year ago.

My cell phone bill is unchanged. High speed internet went from $40 to $42, a month. But it had been $40 since I signed up in 2003 so a $2 increase after 4 years is not unreasonable. A beer at my favorite bar costs the same as it did last year. I pay my pool guy $45 a month just like I've been paying for the past 2 years. Property tax went up 3%.

Yes gas is up a lot and electricty went up 8% or something like that. But when you average it all out, I just don't see a huge spike in my expenses.

Anonymous said...

"He predicts foreclosures will top out at four or five times the current level — enough, he says, to induce a recession or at least bring the economy to the precipice."

11k out of ____ # of households in CA for the quarter is the comparison that we need to see. Then compare to normalized historical averages. Then extrapolate his prediction of 4X to 5X of this # and see what his event horizon is in reaching this level & how long it will stay at the predicted level. I do not know the context of if he is correct and this is the trend it looks like alot of realty for any economy to absorb.

Frank said...

Here's what's happening in California ... I live in a rented McMansion ($3,500/mo) in Newport Beach:

- The house I live in was bought for $1.2M.

- At the peak it was worth around $1.3M.

- The exact same model house in our community is now selling for between $700-800k. (This refers to actual SALES - there are plenty that have been listed for $1.2M for months and months that are NOT selling.)

With Newport being part of the liar loans game, I'm looking forward to buying either the house we live in or another just like it for under $400k (paying cash of course) after the bloodbath paints the town red.

Interestingly, I heard from a realtor in Newport who handles high-end listings that people here with money pay cash and most of the loans are liar loans that will foreclose.

irrationally complacent said...

Seems a good reason for the market to rally!

òó
¿
-


irrational

Lars said...

Recall that in 2000, the bubble was called dot com and it tanked. Money moved from stocks to real estate to inflate that bubble (with the help of Greenspeak). It should be no surprise that money is flowing out of real estate and into the stock market. Maybe the cycle will repeat if the stock market again becomes the bubble.

Anonymous said...

$1.3M to $700K...no way. Sorry I call bullshit on this one frank.

If I am wrong, provide some addresses with sales over $1M and sales in the $700K range that can be verified on zillow.

Anonymous said...

So we bought our house in Valencia for 290,000 in 2004, 1700sf and sold it for a nice 135,000 profit, the house got resold another time and some idiot paid 690,000 for it. Man the world is full of stupid, stupid people. We sacked the money away, living modestly and laughing all the way to the bank. I don't give a shit how much money the people made with this house after us, I got a some nice money and I am happy.

Anonymous said...

"11,000 foreclosures in a state of 30,000,000 people is the same thing. It could double next month and still less than 1/10 of 1% of the population would be affected."

The market has definitively stalled and more significantly, the psychology has changed. Foreclosed properties will destroy neighborhood valuations everywhere. Foreclosures will be weapons of wealth destruction (WWD, the insidious relative of WMD).

Anonymous said...

Actually, accounting for the devaluation of the dollar, we're closing in on DOW 8,500.

Anonymous said...

I think there were 30K NOD in March for CA.

The 11K figure is houses lost to foreclosure for the QUARTER. The record is 15-16K in 1996. So it has increased alot and is almost at the peak.

What % of houses go from NOD to foreclosure? I thought I heard it has been high recently, up to 40%. If 40% of 30K March houses end up in foreclosure, that would be 12K, or 36K per quarter. That would be more than double the record.

How many houses in CA? 30 M people. I would guess 6M houses or so. Maybe 10% sell every year so 600,000 houses. So if 36K houses in a quarter go to the bank..over 140K per year...that's significant.

It's early yet. Would have though you'd see price declines in S. Ca but so far only SD.

AS for the dow, yes it's in dollars, but a falling currency isn't usually good for the economy of a country. Inflation, higher interest rates, etc.

Alas, I don't know why it goes up. "earnings", but it's nonsense. AS soon as china goes into a slowdown and it's parabolic market prices fall...that's the end. Deep recession, but when?

What can an honest man do when all around him are compulsive gamblers?

Anonymous said...

The Dow is up because the tax burdened people have funded this legalized gambling in the form of an IRA.

Watch next couple of weeks as the profits are taken!!

Anonymous said...

to frank (renting in Newport), if rates are still low when you plan to buy, why would you pay cash? You can make a lot more money in other investments...the yield on a home comes nowhere near. I manage a hedge fund for a billionaire in Orange County, and he doesn't own his home outright...for just this reason.

Anonymous said...

800............that's all?

Budvar said...

"Since the start of the year the dollar's gone from .77 to .74 against the Euro, a 3.8% decline in the dollar
The DOW is up 4.0% YTD.
NASDAQ is up 4.6%
S&P is up 4.66%

Overall you're still ahead in US equities."

Right, now take out taxes, commissions & fees, on your gain and you're losing money hand over fist.

CashFLo said...

"even if the prices go down it will not effect the country"

We'd take your financial advice more seriously if you knew the difference between affect and effect. Trolls: like shooting fish in a barrel.

coveredwagon said...

It's no big deal. There's nothing to see. Now move along.

Anonymous said...

It's not just southern Cal. San Mateo, Marin, Salinas, and Santa Clara Counties are all very over valued and have debit to income ratios far worse than those in L.A.

Anonymous said...

I don't know why we bother to refute the trolls, but here's a post from today's The Big Picture (Barry Ritholtz). Yeah, we're really cookin' now:

Back in Black
in Investing | Markets

Eddy Elfenbein points out that the SPX is now positive for the millenium, since its close at 1471.48 on April 17, 2007.

That's 0.15% higher than the December 31, 1999 close of 1469.25, for a 7-1/4 year gain of 0.15%. (The bad news is that inflation has increased by 22%; dividends have added about 12.5%)

Ben Franklin said...

All exciting reasons for why the market is peaking, but it's a well-known phenomenom that happens around this time of year.

Tax day was April 17th, and people who are going to save on taxes by contributing to their SEP IRA, etc, have until tax day to do it (unless they apply for an extension). If you're paying taxes, you'll wait until the last day to pay, and typically alot of people who contribute to their plans will wait until tax day. My CPA says it's a mad rush at the brokerage houses, as people send payments in, and it'll take a few days for the contributions to make it into the market as mutual funds, etc.

It's so well-known, it's called the April 20th effect. It's basically foolish money rushing in to pump up the market.

HOWEVER, it's good news for bears, who need to buy short / put stocks on an upswing.

Anonymous said...

One foreclosure in California, is like 3 foreclosures almost everywhere else in the country.

Lost Cause said...

Another trend started in California.

Stunned by the lingering morons said...

I love it! Some people are posting are still posting as if there is nothing wrong! Some annon posting saying that an 800% increase in FC's not an issue in a state of 30million--ha, ha, has how stupid can you be!!! Posters like this make it clear why we are where we are!! An 8 fold increase in foreclosures is a dynanmic indicator of things to come you twit. The forelcosures do not increase in a vacuum and have serious spreading effects. God why are some people a.) so stupid and b.) can they really be that stupid and know how to use a computer and talk abotu grains of sand. I tell you, you have a grain of sand for a brain......800% increase is A BAD THING. O.K.? Get it-its bad when foreclosures increase eight fold!

Anonymous said...

11,000 foreclosures in a state of 30,000,000 people is the same thing. It could double next month and still less than 1/10 of 1% of the population would be affected.

No, does not work that way you twit. Households with mortgages are made up of 4 or more persons. Also these people are linked to many others--financially and their neighbors are up to their eyeballs as well. Its a major problem. Do you work for NAR or are you just an idiot?

Phil O. Math said...

Oooooh, like I'm sooooo surprised. If you're shocked or surprised then, seriously, under what rock have you been living?

Boston is no differnt from any other market and will experience the same effects, peckers.

D.

Anonymous said...

"Lars said... "

(See his posting: April 20, 2007 11:14 PM)

Now this guy got it completely right. Money, will always seek refuge and return, moving about dynamically in the quest.

In the case of R.E., all the smart money is now **OUT** of the game with their cash returns burning a hole in their pocket.

Leaving the STUPID people holding the option-arm bag, listening to a giant loud sucking-sound and the clang of foreclosure, as the open marketplace efficiently hands their money over, irretrievably, to the SMART people!

The SMART money takes the STUPID money THEY NOW OWN and seek (attempt) some decent investment return, cuz there's none in R.E.

So, where do they go??

T h e S t o c k M a r k e t!!

DuhhhhuuhhhhuuhhHHHHHH!!!!!

It's a yet another sign of real monetary turmoil right there in clear view before your eyes.

The printing presses have been running max-tilt for over six years now after the Dot.com bust.

Where do you THINK all this much money has to go now, anyway? now that R.E. is NFG!?.

The stock market will, in itself, become another asset bubble for 'awhile', until the SMART money suddenly goes real short, leaving the STUPID masses holding their ass-es. (read: panic sell-off, which is GOOD for those with SMART timing, BAD for the STUPID!)

J u s t L i k e R. E. W a s!

This next asset crash, will in-fact become THE most efficient transfer of STUPID money to SMART people the world has ever known, in an inescapable logical next step in the unwinding sequence of events.

So, for those of you that ARE so amazingly STUPID to be quoting a fast rising stock market, in this fiscal environment, as some sort of economic health indicator, you are so lacking in basic knowledge of economics that your really should be keeping your mouth shut.

Unless you really LIKE proving what a jackass you are. You have no idea the hell you're talking about, not even the bare basics of it.

Anonymous said...

Well put anon 8:05! Especially the;

DuhhhhuuhhhhuuhhHHHHHH!!!!!

Anonymous said...

11,000 foreclosures per quarter x 4 persons per house = 44,000 people out of home per quarter x 4 quarters per year = 176,000 people out per year x 4 years = over 900,000 people directly affected in California

That's only if things don't get worse. If it's already this bad and the housing trolls claim Cali prices are still rising and the economy is strong, what will happen when prices drop and people owe more than the home is worth and unemployment goes back to the normal 5% range??

Anonymous said...

Lets put this in proper context. Many have seen this chart from Credit Suisse showing the schedule of ARM resets. Look at where Caloifornia foreclosures are today. Now look at the chart. We are in month three or the third bar of this chart. Now look at the size of the bars moving forward.

http://www.irvinehousingblog.com/wp-cont...

We could see foreclosures in CA double or triple or quadruple the record number of foreclosures hit in 1996. That is not hyperbole.

Anonymous said...

Real estate is the backbone for everything. You buy a bred it is inside the real-estate, you buy gas on some ones property, you sign your home loan inside the building own by someone. Everything is about the real estate and it will never crash. Laws of supply and demand are limited in real estate. There are ups and downs and people with money just wait to get in and I'm not talking about guys who thing they will buy a $400000 home in Newport. There are groups and individuals showing up with many millions in cash at foreclosures and just wait how they will suck the rent money from dreamers who dream of real-estate bargains. Look at the dollar value - going down and down. Pretty soon you will be sending your rent check to Sudan or Saudi Arabia or.... , but keep dreaming - bargains are jus around the corner.
Look at the amount of foreclosures in OC – look at the loans in OC – 30% of OC homes carry no mortgage. Most of the foreclosures you see in Riverside, San Bernardino, etc.. Why? I would say because of dreamers on the other side thought they will score big in getting in real-estate – ooooppppsss – did not happen and I do not think it will happen for dreamers on either side. If you balance out the dollar, economy, inflation etc….. you will see that the housing market ups and downs are +/- 20% and in the long run going up +/- 7% a year.

Anonymous said...

Maricopa County saw around a 1000% increase in foreclosures from March 2006 to March 2007.

Keith, why didn't you report that?

Anonymous said...

Sure, 7% a year. Do people's incomes go up 7% a year? Then why would home values?

No "foreclosure" investors are buying homes to rent out. They'd be earning 3% on their money doing that. Oh, wait, houses go up 7% a year too, I forgot.

Why are inventories up at all given that house prices are such bargains and there are so many people with so much money? Why did prices go down in the early 1990s (50% adjusted for inflation)? Weren't the same issues in place then? Lots of people with lots of money, lots of OC mortgages paid off.

If anything OC mortgages paid off will be great...people can sell and spend 1/3 as much on a bigger house in a cleaner, nicer area of the country. Oh, I forgot, OC is IT, and no one wants to live anywhere else.

Anonymous said...

Not all NOD go into foreclosures.

However, if you have a NOD, it's a given that you're on thin ice, financially speaking.

NOD for March were 30,000. So yearly that's 360,000 homes on thin ice. There are about 6M homes in CA.

The GOOD news is that rates are about 40% NOD into foreclosure. So only 40% of the 360K or about 200,000 homes will be lost this year. Only 3.3%!

Anonymous said...

" Frank said...

Here's what's happening in California ... "

Friken douchebag JUST moved to CA and now he is an expert on the local RE market and culture. Give me a fucking break Frank the "I wrote a #1 Best-Seller, so I am better than you'' douche bag. You pompous ass, you picked the perfect spot to hang your tootsies. Fitting right in with the rest of the arogant pricks in Newport! HAHHAHAHAHA