Is it possible that some folks will never leave the Denial stage, even as housing prices continue to plummet, inventory continues to swell and demand continues to crater?
And what stage do you think the majority of these groups are in today:
1) Realtors
2) Homedebtors
3) Home builders
4) Illegal Mexican laborers
59 comments:
Denial rocks!
Late denial. Not releasing chattel yet.
1) Realtors - DENIAL
2) Homedebtors - DENIAL
3) Home builders - FEAR
4) Illegal Mexican laborers - DESPONDENCY
I'm gonna say realtors and homedebtors are still in denial. Developers are lowering prices to get while the gettin's good, and illegal mexican laborers don't have the luxury of denial. Either they're working or they're not, and I see a lot more of them hanging outside of home depot as of late.
Debt-owning sheeple - ignorance
Lying realawhores - denial
Landbanking builders - fear
CDO/MBS bag holders - ignorance
Illegals - relief (it's still better than wherever they came from)
You've been saying they're in denial for 2 years now. You can't be in denial for 2 years.
http://biz.yahoo.com/seekingalpha/070604/37282_id.html
This should jolt some of them out of denial!!
Seems like each stage is taking roughly a year:
2003: Excitement
2004: Thrill
2005: Euphoria
2006: Anxiety
2007: Denial
2008: Fear
2009: Desperation
2010: Panic
2011: Capitulation
2012: Despondency (Time to Buy)
Some may argue that 2012 will be too soon, but I believe that most of the deflationary forces will have worked their way into prices by then. There may not be great appreciation between 2012 and 2015, but the tax incentives and low prices will probably make purchasing worthwhile again.
1) Realtors: Lodged firmly between desperation and panic.
2) Homedebtors: Fear, Fear and still more fear!
3) Home builders: PANIC! Definitely panic now!
4) Illegal Mexican laborers: Confusion?
Here in the Northwest people are still saying "It's different here" based on sales figures and Zillow data from the past.
All you HPers are so angry and bitter, you can see from your chart that you are in the Depression stage.
Guess what? That means it's the perfect time to buy! What a great opportunity! (maximum financial opportunity)
(BTW I have some condos for sale you can have for a "bargain")
50% Fear
25% Desperation
25% Panic
Depends on who you are and where you live.
"Some may argue 2012 will be too soon"
Well I guess I COULD argue that but your analysis thus far seems spot on! So what would be the point? To date each stage has taken about a year or the reaction to the market turns can largely be identified more or less to a particular year.
What we may soon find however is that like our illegal friends, builders, realtors and MB's may not have the luxury of a full year's denial, fear etc?
Judging by how quickly subprime felt apart, momentum is clearly gathering.
DinOR
"so angry and bitter"
Can SOMEONE please get Mr. 'I love kiyosaki' a copy of another great book?
"Never Saw it Coming" by Karen Cerulo
It's all about the disconnect between American's positive "can do" attitude and REALITY!
For example: How many American's nearing retirement age feel good about how their standard of living will look like when they leave the workforce? 70% feel good about their prospects in retirement.
Reality? The average size of a 401K account is $29,000. Um... all the PMA (positive mental attitude) isn't going to make that math work! If having a realistic attitude about our prospects for the future labels us "angry and bitter" then I'm just fine with "the power of negative thinking".
DinOR
i love kiyosaki said...
All you HPers are so angry and bitter, you can see from your chart that you are in the Depression stage.
Guess what? That means it's the perfect time to buy! What a great opportunity! (maximum financial opportunity)
(BTW I have some condos for sale you can have for a "bargain")
Joking right?
Let me guess going long when the Nasdaq was at the 5000 level was a great opportunity too?
Real Estate is not as liquid as a Stock market. The correction will be slower than the stock market but no less painfull. Similiarly to stock securities the garbage and scams will have huge reductions and the quality will sink as well but will weather the correction / crash much better.
In my office (gov't agency) where I work in metro DC there is an urban legan about a clerk who made over a million dollars flipping condos. That she got out before everything starting cooling off and that she then quit her job and went back home to live the good life(virtualy no one in DC is from DC).
Well I finally met her. Of course you ask how could I meet her if she left to live happily ever after with her million. Here is the answer:
She did make a tidy sum fromthe purcahse & resale of several condos before the collapse, but it was no where near a million. But where is is from it would be an amount that would let her live the high life. And of course she did!! for a while.
She bought a great place outright, furnished/remodeled it to the hilt and got a very expensive car. She lavished money on all her relatives who looked to her as a big success/largess. She got a another clerk type job to just have something to do. But the champagne taste she developed from all the easy money was tapping out her remaining funds and clerk pay check so she wanted to make another killing in RE. Sadly she became the roadkill of the bursting bubble.
She HELOC'ed it all and bought several places she thought she could fix & resell quickly for a profit plus bought several pre-construciton units in her home town to flip. The back stop was that they could all be rented. She of course used toxic waste to finance all of them.
Long story short she fell flat on her face, lost all the properties in foreclosure and/or short sale as she could not sell any of them for a profit nor rent them for sufficient positive cash flow. One that she did rent out was trashed and had 30k in damages.
So she's back with the gov't making 25-30k as a clerk and salavaged enough money/possessions to have a comfortable apartment.
Easy come, easy go 'Nuff said
*******************************
San Diego
1) Realtors-Arrogance due to greed
2) Homedebtors-Denial
3) Homebuilders-Denial based on Greed
4) Illegal mexican laborers- ignorance based on stupidity!
AP
Meyer-Sutton Files for Chapter 11
Monday June 4, 4:36 pm ET
Georgia Home Builder Meyer-Sutton Files for Chapter 11 Bankruptcy
WASHINGTON (AP) -- Georgia builder Meyer-Sutton Homes Inc. filed for protection from creditors Monday in the U.S. Bankruptcy Court in Newnan, Ga., the result of a "sudden and dramatic" decline in business.
Meyer-Sutton, of Fayetteville, Ga., listed total assets of about $44 million and debts of $40 million in its bankruptcy petition. Meyer-Sutton Homes and affiliate Meyer-Sutton Land Acquisition Inc. filed for Chapter 11 protection. Both companies are owned by James W. Buchanan.
Just looked at a Nice home in Palm Springs. 1.1mil reduced to 825k still not sold......Hmmmmm?
1. Anxiety
2. Denial
3. Anxiety
4. Constant state of Fear
1) Realtors: Scared, I know one who made 300K last year, hasn't made a dime this year.
2) Homedebtors: Denial, "My realtor researched it"
3) Home builders: In trouble, "How are we going to make payroll"
4) Illegal Mexican laborers: HAPPY, They'll have z-visas and welfare in the next 6 months.
I've always thought this should be done more often.
http://money.cnn.com/2007/06/04/
real_estate/builders_taking_trade-ins/index.htm?postversion=2007060511
Maui must be the only place in america i do not see illegals outside HD. But there are still alot of illegals on the island and anyone turn their head for cheap labor. Major from south south america and alot of european getting free gov services.
"Well I finally met her"
Damn, that was one helluva' ride though huh? Nothing like being your OWN greater fool now is there?
While her story derailed fairly quickly countless others will languish for a painfully long time! Her early run can be attributed to being early in the mania. In 2003/2004 NO ONE was talking about "maybe we'll just rent it out"!
But it SO EASY she couldn't resist and came back for a second round of free money. I'm convinced there will be no winners by the time this thing is all over.
DinOR
Hey Keith, still like Obama? I cannot understand how someone who supports Ron Paul can also support this.
http://tinyurl.com/2wye5s
Ringing in for N. California (Sacramento area)
Based on how I saw a Realtor happily prancing around an unkempt REO home she was trying to set up for open-house a month or so ago (still no takers and 6 mos on market)...
(Reators - Denial)
Based on Southern California homebuilder, Pardee Homes, entering an already stagnant, overpriced, crowded Sacramento newhome market. Based on still unreasonably priced new homes in the $400k-$800k range...
(Homebuilders- Denial)
Based on incredibly low sales numbers, all the For Sale signs still up, time on market and continued price reductions...
(Homeowners - Denial)
Based on Winter cold-snaps yielding fewer and few agriculture jobs to return to, and now that the housing boom is over...
(Laborers - Bummed)
We still have a 100% overpriced Sacramento market. With a mere 7-15% annual decline in values, it's going to take a long time for incomes and rents to catch up to current home prices. Maybe tightened lending standards, future interest rate hikes, or economic downturns, will allow some long-needed prudence to prevail?
Was the DC clerk's name Laqueisha or some such?
Chicago is pretty cluless. Look at yochicago.com some time. I like trolling on there.
Second City Bubble
Anonymous said...
Hey Keith, still like Obama? I cannot understand how someone who supports Ron Paul can also support this.
http://tinyurl.com/2wye5s
June 05, 2007 4:45 PM
B.H.O. has many other reasons not to vote for him on top of this one.
1) Realtors - ON THEIR KNEES
2) Homedebtors - DOGGY POSITION
3) Home builders - RECTAL CRANIAL INVERSION
4) Illegal Mexican laborers -NO ABLA ENGLAY
AP
Meyer-Sutton Files for Chapter 11
Monday June 4, 4:36 pm ET
Georgia Home Builder Meyer-Sutton Files for Chapter 11 Bankruptcy
***********************************
This builder 's business is on the south side of Atlanta, ie the shithole side. Lots of their projects are in Clayton county which is the second highest county in foreclosure rate nationwide. They build in areas where don't see white face for miles.
This is the direct result of the sub-prime lending halt. Blacks with 510 FICOs can no longer get the mortgages and poof builders are gone.
Will this affect builders or prices for that matter in Alpharetta, East Cobb or Cherokee Counties? I doubt it.
1) Realtors = DENIAL
2) Homedebtors = inward ANXIETY, outward DENIAL
3) Home builders = FEAR
4) Illegal Mexican laborers = FEAR
Isn't 2012 already shaping up as an end-of-the-world scare?
In the meantime, there's still time for Egyptian River Cruises...
In my office (gov't agency) where I work in metro DC there is an urban legan about a clerk who made over a million dollars flipping condos.
Where I live, there's an urban legend about two teenaged busboys at a restaurant in Glendale who made over $10,000 each in one month flipping Magic: the Gathering cards in the early Nineties.
One cashed out at that point; figured he'd pressed his luck enough.
The other put all his winnings back into -- you guessed it -- Magic cards. Because Black Lotuses were topping $1000, other rare cards were following suit, and prices had nowhere to go but UP!
When WOTC reissued previously-rare Magic cards at face value (undercutting the counterfiets coming over from Taiwan), the bottom dropped out. Comment from the second teenage Magic tycoon: "I'M WIPED OUT...."
Does anyone have any details on the Oregon Senate Bill 925???
This is a very good post, and
something for everyone to remember ...
"Living beyond your means is never a good idea."
Anonymous said...
In my office (gov't agency) where I work in metro DC there is an urban legan about a clerk who made over a million dollars flipping condos. That she got out before everything starting cooling off and that she then quit her job and went back home to live the good life(virtualy no one in DC is from DC).
Well I finally met her. Of course you ask how could I meet her if she left to live happily ever after with her million. Here is the answer:
She did make a tidy sum fromthe purcahse & resale of several condos before the collapse, but it was no where near a million. But where is is from it would be an amount that would let her live the high life. And of course she did!! for a while.
She bought a great place outright, furnished/remodeled it to the hilt and got a very expensive car. She lavished money on all her relatives who looked to her as a big success/largess. She got a another clerk type job to just have something to do. But the champagne taste she developed from all the easy money was tapping out her remaining funds and clerk pay check so she wanted to make another killing in RE. Sadly she became the roadkill of the bursting bubble.
She HELOC'ed it all and bought several places she thought she could fix & resell quickly for a profit plus bought several pre-construciton units in her home town to flip. The back stop was that they could all be rented. She of course used toxic waste to finance all of them.
Long story short she fell flat on her face, lost all the properties in foreclosure and/or short sale as she could not sell any of them for a profit nor rent them for sufficient positive cash flow. One that she did rent out was trashed and had 30k in damages.
So she's back with the gov't making 25-30k as a clerk and salavaged enough money/possessions to have a comfortable apartment.
Easy come, easy go 'Nuff said
June 05, 2007 4:06 PM
Great read:
http://www.informationclearinghouse.info/article17821.htm
Another ANON poster said...
You've been saying they're in denial for 2 years now. You can't be in denial for 2 years.
-----------------------------------
I say...
Sure you can...Just ask David, Gary and Alan.
You can even ask George if you don't believe the aformentioned.
RayNLA
RayNLA
Another ANON Poster said...
Long story short she fell flat on her face, lost all the properties in foreclosure and/or short sale as she could not sell any of them for a profit nor rent them for sufficient positive cash flow.
-----------------------------------
You left out the part about moving back to Sacramento and married a guy named Casey.
RayNLA
Hey Keith!
Put the clip of Ron Paul with John Stewart on your main page. Please!!!!!!!
I promise not to take out a neg. am. on this 2.5 million dollar home I can't afford.
Zillow isn't helping matters out when it comes to denial.
I sold my house 3 months ago for $421K. Since then not one home has sold in my old subdivision. 11 for sale as of today. Zillow says my home is now worth $448K, even though it was at $439K the day I closed. How in the hell does Zillow figure it went up $11K with no new comps to compare against except the sale of the actual hose for $27K less? Makes no sense.
Gets even more messed up. A house 2 doors down foreclosed in October. It was bought back by the bank for $398K. That sale is recorded in Zillow. The home has been listed for sale at $398K since March, luckily right after I closed. Zillow values this one at $460K!?! Same model as my old home, same sized lot, both have a pool, essentially the same house.
So WTF? How does a house that sold for $398K in October, is right next to one that sold for $421K in March valued at $460K according to Zillow?
I don't blame people for being in denial with this shit going on.
Reality? The average size of a 401K account is $29,000. Um... all the PMA (positive mental attitude) isn't going to make that math work! If having a realistic attitude about our prospects for the future labels us "angry and bitter" then I'm just fine with "the power of negative thinking".
----------------------------------
Negative thinking or fantasy world?
Typical HP knee jerk reaction. Oh no $29K in a 401k well that means the sky is falling. No it isn't and you should get your facts straight before making a fool of yourself.
1. Average 401k value in mid-2006 was $102,000. I have no clue where you get this $29K from. US stocks are up 20% since then so $120K is probably about right for today. for people in their 60s the average in 2006 was $141K, add 20% and you're close to $170K for them.
http://money.cnn.com/2006/08/24/pf/
retirement/ebri_ici_study/index.htm
http://www.bargaineering.com/articl
es/did-your-401k-balance-increase-
50.html
Your're also forgetting IRAs and Roth IRAs. Average IRA is $35K. Add up the 2 you're looking at $200K+ for the average retirement fund value for someone about to retire. $29K, $200K yeah same thing.
Get a clue and try again.
1) Denial 2) Fear 3) Fear 4) Fear
regarding trade-ins mentioned in the link above - it does keep movement in the market which might make people feel better overall about the market since it would improve the numbers. It also perpetuates an elitist society since only people that already own something can gain from it - so it's okay to screw your kids -- heck we're already ruining the environment and sending all the high-paying jobs overseas - what do they need a house for? Trade-ins won't help people moving from coops or condos since developers would be limited in what they would be allowed to do to those types of properties. Ultimately it seems like a lot of work for an unknown or possibly no profit. There are fairly substantial transaction fees for property transfers and there's nothing to say that the developer isn't left holding the bag on a property that won't move due to location or that the "buyer" doesn't gain a lemon from a developer that took too many shortcuts in order to make a buck. Further - it doesn't really help those people that already over-extended themselves or are in the middle of a divorce and actually need two less expensive places to move instead of their one overvalued home.
realtors = fear
homedebtors = denial
homebuilders = desperation
illegal laborers = despondency
westchester chick said...
heck we're already ruining the environment and sending all the high-paying jobs overseas
If by high paying jobs you mean high paying jobs for people who didn't go to college doing physical labor, then yes. You need to quit your job as a barista, give up your dream of being a teacher with summers off, and get a degree in something besides art history.
High paying jobs are all over in our service economy, particularly for knowledge workers. Accountants, consultants, IT professionals, lawyers, and even mortgage and real estate people have been making a killing the last five years. Where have you been? Smoking a bong with a Kerry/Edwards sticker on the side in your 6th year as an undergrad and forgetting to vote?
Average 401k value in mid-2006 was $102,000. I have no clue where you get this $29K from.
_____________
There's a difference between "average" and "median." I'm guessing the $29K figure is the "median"--half the people are below this figure and half are above it. "Average" = the "mean"--the halfway point. The amounts saved by the superwealthy are probably raising the average savings of the Joe 6-packs up to $100K.
Ron "9/11 was deserved" Paul will make it all better by closing the borders down.
Idiots.
Well to have denial we'd have to have cognizance, and for the vast of the general public there isn't any. At all.
"1. Average 401k value in mid-2006 was $102,000."
You need to read a little closer. The actual quote from the CNNMoney article is here:
"For workers who saved consistently in their 401(k) plans between 1999 and 2005 , the average 401(k) balance rose 50 percent to $102,014, according to a study released Thursday."
This $102K applies only to those people who had opened a 401k account in 1999 or earlier and made regular contributions throughout 2006.
A casual internet search produced the following article published in Dec 2002 :
http://tinyurl.com/3298ws
Okay, so the article is a little old, but there appears to be a shortage of articles that are forthright about participation - they all seem to want to fool you into thinking there is not an imminent catastrophe.
Note: "more than half the paid workers ages 25 to 64 don't own retirement savings accounts of any kind."
So sure, those who have had retirement accounts for 5 years have rising balances - what a surprise! That doesn't change the fact that millions of people do NOT have enough money for retirement, nor are they on any kind of track to change this fact.
So WTF? How does a house that sold for $398K in October, is right next to one that sold for $421K in March valued at $460K according to Zillow?
I don't blame people for being in denial with this shit going on
Uhhh....Zillow is a toy. You can't close a loan with a Zillow estimate.
Using Zillow to price your house is like picking stocks using a "magic 8-ball"
anon said: In my office (gov't agency) where I work in metro DC there is an urban legan about a clerk who made over a million dollars flipping condos.
Damn no wonder I cannot afford property in DC that explains it damn Biotch!
Denial
Greed
GREED
Denial
Fear
GREED
In my office (gov't agency) where I work in metro DC.....
_________________________
That's a great story and typical. I have a friend in San Diego who bought a house for $190k in 1997 and watched it climb to $600k in 2006. He sold in early 2007 for $550k. A nice $360k profit right?
Nope. He and his girl started living beyond their means. Not outrageously, but that's not what it takes. Always had to stay at the nicest hotels and order the most expensive stuff on the plate when we'd go out...things like that. New cars, dumb vacations. Plenty of wasted money on alot of small things.
After 4 refi's in 8 years he pretty much had to sell because he couldn't afford the payments. He did walk away with about $100k in profits and is renting but he and his girl haven't adjusted their lifestyle, so that shouldn't last them more than another 2 years. Plus his girl has become accustom to a certain lifestyle so things will probably end once the money runs out.
To the monkeys arguing about average 401k plans....
If you actually READ through the report for 5 minutes, here's what you find.
-YES the average balance is 102k. But there's a world of difference between average and median. The median balance is only 54k meaning 1/2 have more and 1/2 have less.
-NO, this doesn't represent all 401k accounts. Only 37% and those are, by ommission, from the largest companies that have the best salaries, matching programs, etc. You can bet your bottom dollar that for smaller companies that offer lower salaries and little or no matching, the balances are WAY smaller.
-NO, people in their 60s didn't make 20% because on average they have a more conservative portfolio and only put about 60% into equities.
YES, you can guarantee that people in their 30s and 40s who make up the bulk of those with loans against their 401k have done it to take out a home loan. The crash will be doubly hard on them.
How half of Americans can figure that $50k will pull them though retirement is beyond me.
And how anyone can quote something without taking 5 minutes to learn what they are talking about is als well beyond me.
re: 401(k)s.
The tinfoil hate gang is at it again. Oh no people only have $35 saved in their 401k. Sure and soon enough we'll see millions of geezers starving to death. Wonder how they keep themselves in shape enough to play gold 7 days a week at my club. Must be those new protein bars.
What you renting fools refuse to understand is that just because YOU have nothing doesn't mean everyone is in the same situation. Today's 60 year old bought (key word is bought) a house 30 years ago for $50K. That house is worth $500K and is paid off. As much as you try to spin your little Ron Paul supporting minds around it, the fact is home ownership has made millions of people very wealthy over the past few decades.
Realtors-Fear they are losing their A$$.
Homedebtors-Denial heading towards fear this summer.
Homebuilders-PANIC!! They know exactly where they stand and they are dropping prices on existing stock and walking away from land. Only thing left to do at the big companies is to raid the company vault and act suprised when they finally file for bankruptsy
Mortgage Brokers- Clueless they still send me refi material daily and I sold last year. I wonder if I can refinance my rent.
Illegal immigrants-Despondency
I will say one thing for them at least most of them want to work. That is more than I can say for a lot of Americans. Their blood will be the first on the tracks in the downturn.
However remember unless you are a Native American your just an immigrant a few generations removed. Being born somewhere doesn't make you special. Its just lucky for us our ancestors came here.
Sequoia512
Anonymous said...
I've always thought this should be done more often.
http://money.cnn.com/2007/06/04/
real_estate/builders_taking_trade-ins/index.htm?postversion=2007060511
June 05, 2007 4:27 PM
-------------
I tried to do this in the fall of 06 and had a realtor pound the pavement to ping all the builders with active developments in the new city I was going to have a job (Metro DC). Most just said NO. A few Laughed. One or two were interested but wanted to rape me of my equity as if I was taking a haircut anyway. So I just took the haircut, got the hell out and rent. Now 6 months later developers are sobering up, i.e. beyond denial and in fear/desparation by institutiing these trade-in programs. Well, sorry I'm going to be the clean buyer in a few yeas when they hit rock botom who can move right and take a spec home off their hands and they will pay dearly for it to the tune of the haircut I had to take AND MORE!!
annon said...
You've been saying they're in denial for 2 years now. You can't be in denial for 2 years.
Devestment says
There are no term limits on denial.
Bought New in 1993 1803sqft, .51ac., San Diego county inland. $174k
Sold in fall of 2003 for 379k
If i would have waited til peak in 2005 it was listed at 525k
Today same about 450k and sliding
Yes, my timing was bad but, I'm out now!
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