That great sucking sound you hear now is California, as the state hurtles toward a housing-led depression. California seems cursed - earthquakes, fires, riots, mudslides, illegals, Britney Spears, and now a massive housing crash.
A giant wave of defaults and foreclosures is now hitting their shores, and it's getting ugly. As predicted here, the state is now facing massive deficits, home prices are in a death spiral to the bottom, and "for sale" and "foreclosed" are the new signs of the time.
Why?
Because California home prices detached from all known metrics - price to income, price to rent, historical price trends - and the Ponzi Scheme made California housing gamblers do really really stupid things - namely take out interest-only and negative-am loans they had no chance of ever paying back, while hoping against hope that the mad appreciation continued.
And then it didn't.
So who gets hurt the most? It's not the homedebtors - having put nothing down they just turn in the keys and walk away, and it wasn't their home anyway, it was the bank's. So it's the banks and CDO buyers - the bagholders and their shareholders, who'll get reemed.
And these toxic avengers are led by Washington Mutual, Countrywide, Wells Fargo, First Federal, IndyMac and CIT Group. The Great California Housing Crash is going to destroy 'em, along with Freddie Mac and Fannie Mae who bought up the junk, haven't marked-to-market, and now can't sell it off. And the US taxpayer is gonna be on the hook.
And that's the way the cookie crumbled.
Report: California foreclosures up 421% in Q4, hit 20-year high
Foreclosures in California hit a 20-year high during the fourth quarter of 2007, a real estate research firm reported Tuesday.
DataQuick Information Systems said 31,676 homes ended up in foreclosure during the quarter ended Dec. 31, the highest number since the company began tracking such numbers in 1988.
The foreclosure figure is a 30.8 percent increase from the previous quarter and a 421.2 percent jump from 6,078 foreclosures in the same the same period of 2006. Homeowners received 81,550 default notices during the quarter, up 12.4 percent from the previous quarter and more than 114 percent from the year-ago period.
January 23, 2008
FLASH: This is not a misprint: California foreclosures soar 421% from last year
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29 comments:
SWEET!!
I've pretty much decided on buying in early to mid 2009. Looks like I'll be getting a smoking deal.
Thanks to all you sucker homedebtors who listened to scumbag mortgage brokers and realtors on commission. I'll be buying your house next year for 50% off what you paid for it when you "bought."
Californicators brought their evil with them across the country. Washington, Oregon, Nevada and Arizona used to be affordable, until the invasion from the Golden State (snicker) started.
Now the rest of us are going to pay because of the jackass loans that were written out there.
Make all the cracks you want about Tex-ass, Flori-duhhh, Neva-duhhh, and Arizon-uhhh. Only a Californicator could think a 850k teardown was rational and a good buy.
We could have had a much smaller bubble, and a gentler recovery from this hangover, if they wouldn't have been such pathetic greedy pigs out there. Is there any way the other 49 states can secede from those dingleberries?
"I'll be buying your house next year for 50% off what you paid for it when you "bought."
I don't know frank. I mean, they can't just give their homes away!
"Californicators brought their evil with them across the country. Washington, Oregon, Nevada and Arizona used to be affordable, until the invasion from the Golden State (snicker) started."
Nevada housing is so fucked it's not even funny. I remember when my parents bought their home for 100k in 91 that was a lot for a home in Vegas. 200k would get you palace. Then when the boom came you couldn't even get a shack for 150k. Now it's time to come back to reality.
Keith,
I read an article yesterday about WaMu and one of their executives said that people are now "Walking away from their homes".
Really, he said, even if they can pay, they are just walking since they feel they are lost their equity. This is the mentalilty they've been trying to avoid all along. It's here now and its gonna get more worst.
How come we dont get news like this in Jersey.
Danny
Well at least the blacks, whites, and mexicans all get along so well in California. I'm sure they'll all help each other out.
re: NV housing
I love KaliFornicaters. It was a fool from Pasadena who bought my Las Vegas house, all in cash, for double what I paid. And the funny thing was, he truly thought he was getting a steal. I even told his realtor how i hated to sell at such a low price, but I had no choice as I was moving out of state. It was hard keeping a straight face during our discussions.
Judging by what other home are selling for now, he's down about $175K since. Way to go dumbass!
Oh and thanks.
You ai'nt seen nuthin yet...
Just physically drove the Central Valley out of curiosity. It is a ghost town and looking dangerous after sunset.
I wouldn't take those brand-new tract homes in a cow pasture for free if you gave them to me. Even for Free, too much downside.
Also, I do not find the smell of cowsh*t in the morning an aphrodisiac in any way.
Arson is the ONLY answer. California is F*cked for years to come. The sheeple will be living under bridges soon.
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Here in San Diego there was a young gal fresh out of High school basically, who received her Realtors shingle.
Well, I guess because of her daddy's connections got one of her very first listings in Rancho Santa Fe.
This place was palacial, with grounds, pools, guest houses, riding arenas......yada yada!
With a price tag to match.
This young, wet behind the ears 'kid', whose ink was barely dry on here new r.e. license, sold this place. Now I'm not sure of the actual sale price, but it was listed for over $26 million !
Now, lets say it was a fire sale and they knocked off 50%, that is still $13 mil!
Pretty sweet for your first gig huh?
.
You don't have to sell many of those in a year to make a good living!
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I have heard the same story about some young guy in Miami.
In his first year (mind you this was about 4 yrs ago) he had 'over' $50 mil in sales.............he was 21
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I think they are all in my neighborhood downtown - soon to come - skeleton buildings,(yes there are still 4 or 5 under construction) when banks stop construction loans, and we have 3 or four unfinished skeletons downtown. . .should look real nice for the vistors. . .hmmmm maybe we could make them into a new Seaworld attraction - Shamu jumps into a pool for a 20 story unfinished condo??
In our local news last night:
In Vallejo, CA people are leaving their homes because prices have fallen 200k more than what they paid for them.
Yahoo forclosures must be swamped with data because the website link only shows Alameda with just TWO forclosures in the entire city, when earlier this month the listing for Alameda were 70 homes in forclosure.
The forclosure numbers are staggering, and will only get worse by April which is income and property tax time.
Think about this: realtors who havent sold a home in the last 6 months are living on the money put aside for paying income taxes...
I predict April to be a very interesting month for everything.
Anyone feeling confident enough to buy a home between now and next year?
'LEAVE BRITNEY ALONE'waaaaaaaaaaaaa
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THAT'S ALL YOU BASTARDS WANT IS MORE MORE MORE!!!!!!
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EVERYONE LISTEN!!!!!!
If you make an offer on a forclosed house DO NOT offer over 50% of the loan balance.
Stick together, let the banks know what its really worth. Today the only way to determin the value of a house is what someone is willing to pay for it. If we are smart, 50% off of liar loan bubble price will be the new, sensible price.
Offer 50%, let the bank say no. In a year when someone else (or you again) offers that 50% the bank will look back at the list of 50% offers and FINALLY come down to reality.
I live in California, it's all you people who live in all those dead states with miserable weather who came to California to ride skates on Santa Monica pier hoping to see movie stars and believeing that song it never rains in so cal, or even California dreaming or California Girls. Who ever heard of dreaming of a life in Missouri? It's all those foriegners and illegals who want the same weather that is almost as close as it is at home. I will admit that California has it's share of goofballs and wierdo's (I was born in Cali in 1958 and have been here a while never a transplant, in most folks cases a rejected transplant)don't know any other way. I always thought others from other states were a little SLOW, but to blame California for this fiasco is getting dangerously into the panic catagory, trying to find someone to blame for this mess. How about England and Australia and China and Japan for loaning you money so they can make even more and you all gladly took it from the money fairy. Remember California has always been ahead of say Iowa and Nebraska and heaven forbid Wyoming when it comes to housing prices, it has ALWAYS been a high cost of living state and you wanna blame the state for your fuck up, keep on grabbing for the longest straw. Each state to it's own disaster because houses only sold for the price a sucker was willing to pay and if a house in WYOMING cost 350,000 for a MCMANSION and it is 850,000 in CALIFORNIA I just pity the fool that agrees to pay that price. Most states have nowhere near the population as Cali and so it would stand to reason the foreclosures would be higher. Some states don't even have the volumne of people as one fourth of our great state. Lay off Cali and quit hating because you couldn't get a million for your dump.
REMEMBER ARNOLD SWARZENEGGER KNEW NOTHING ABOUT RUNNING THE LARGEST STATE ECONOMY BEFORE HE WAS ELECTED TO GOVENOR, HE NEVER EVEN HELD ELECTED OFFICE AND WAS VOTED BACK IN, A REPUB AT THAT, SO DON'T LET CLINTON SAY OBAMA CAN'T RUN A COUNTRY WITH NO EXPIERENCE, HE DIDN'T HAVE ANY EITHER. WHEN HILLARY CLINTON WAS A LITTLE GIRL SHE SAID SHE WANTED TO BE THE FIRST FEMALE PRESIDENT AND ALL DURING THE CLINTON YEARS THAT WAS HER GOAL, SO DON'T BELIEVE THE BS SHE JUST WANTS TO SAVE THE COUNTRY. SHE JUST WANTS TO FULLFILL A CHILDHOOD FANTASY.
Anon 5:38, you make a great point.
I lived in Hawaii, Nevada, and Arizona, and living in those states I came to HATE Californians. Part of it was due to the ex-Californians I met in those states with their attitudes, and part was propaganda because people in those states, especially AZ, hate Californians innately.
Then I moved to California (with a bit of apprehension, I'll admit). I quickly discovered that real Californians don't leave the state and are a completely different breed from the phonies, white trash, and illegals who move to dusty Nevada and Arizona.
There's no way I'd go back to either of those two states after living here. Or Hawaii too for that matter.
I'll sit back and laugh while those of you who only know Californians as the low-down white trash who move to Phoenix, Scottsdale, Vegas, etc., while I live here with the normal, accomplished, dignified people who can afford to stay here permanently.
Funny, I, too recently spent some time wandering the Central Valley of No. Cal. Foresclosure capitol of US, beginning in Stockton working my way south to Bakersfield.
Met many nice FB people. Driving huge gas-guzzling SUV trucks, 1.5+ children, boat/RV in sideyard along with other expensive toy/luxuries/Harleys, etc. plainly proudly displayed or bragging about 'going to the lake'... They liked to make big fun and laught at my new (paid for) Escape Hybrid though, one woman SUV truck driver calling it "childs electric toy". Hmm. 34/32 MPG, and geting better.
To a person, all complaining about money. To a person all living above their means. Many waiting in line to buy a cup of burned overpriced coffee at Starbucks,(my ugly habit-dirty secret too) some actually using a credit card to charge a cup of coffee...
Met a nice young drug dealer and his associates in one newer development. Big, beautiful nondescript 3 car garage home. Said his business was booming and he was enjoying his last days in the house he bought with 3 loans and no money down before sheriff to move him out. He figured he lived for free for almost 2 years, what with the phony re-financing and other legal shenanigans.
He wasn't worried though as he had another base of operations already rented/leased which he planned to default on after moving in. His big worry was how to launder his cash proceeds. I asked him if he was going to buy some of the foreclosed properties in the area and he shot me a look and replied "what, are you CRAZY" all this sh*t is way overpriced and I don't like many of the neighbors, as "they are too stupid and their kids are rude animals".
I asked him about his credit rating and if he was worried about it, he laughed and said he was already using an assumed name and he had bought a book for $29.95 at a gun show in Arizona on how to get a new identity and forg legal documents. When the time came, he would simply make up a new identity and Press On. We parted on good terms and proised to "stay in touch".
Small businesses observed closing and commercial space emptying. No U-Hauls or Ryder trucks available for one-way rentals. Cops with nervous looks on their faces. Fireman washing their trucks killing time until pension as usual.
Road clogged with unemployed. EDD/Unemployment office jammed with new applicants. Parking lot overful. No space available.
Real Estate For Sale signs everywhere. Brown lawns, garbage in driveways of new homes... Foiulage and landscape dying - a metaphor for the neighborhood.
After meeting some nice people and many stupid ones, the only person who truly had it together was the young drug dealer.
The rest were doomed. They are Joe-Six Pack in the flesh. They cannot wait for NASCAR to start back up...
Some were traveling to Florida to see their heroes in action at "the500".
Drug Dealer Theory I:
I will know that we have truly reached bottom when the drug dealer converts some cash into real estate. Save your charts, graphs and rhetoric. Until then, I will drive out to the Valley whenever I need a reminder of How 'NOT" to do it and feel better about my personal financial decisions.
Adult Toys soon to be available for literally pennies on the dollar. Do not find yourself lost or alone at night. Things are getting scary out there.
Drug Dealer Theory II:
Live at or below your means. Under NO circumstances marry an ill-bred stupid breeding idiot and have expensive idiot offspring.
If it flys, floats or F*cks it is cheaper to rent.
Synopsis:
Live at or below your means.
Beware REIC
Thus endeth the lesson.
But prices NEVER go down in coastal areas of CA!
I heard that mantra so many times at cocktail parties in 05 and I just bit my tongue.
Now, it is radio silence when I bring up the state of
housing in CA
California sucks,well most of it does.
Millions of illegal aliens with their turd world culture,lets face it Cali is gone toast,white flight and upper income people have been leaving for years now.
soon itl become just a tourist attraction,nothing more.
I dont think after this drop in Cali itl ever come back to be honest.
anon @ 5:38, you illustrate my point about who is/was from that state beautifully, and you don't even realize it. Remember, you always make your point even better when you use ALL CAPS!!!!
Now for the rest of the readers who live somewhere that Californicators haven't invaded yet, see how lucky you are?
They're a plague!
Be thankful all you have to deal with is some of the financial headache. Dealing with these morons personally is even worse.
Thank you poster:
"Be thankful all you have to deal with is some of the financial headache. Dealing with these morons personally is even worse.
January 23, 2008 8:06 PM"
I agree completely as a native Kalifornian. We have the worst politicians in history, Feinstein, Boxer and (Bella Lugosi) Pelosi leading the way into the ground.
Anothe poster put it nicely: California will become a tourist destination and one big amusement park ride. Again agree. The state sucks. Nothing gets better.
Liberalism is a mental disorder.
I'm reading that congress is going to slip a rider on the $800 tax refund bill to increase Fannie Mae
ceiling from 417k to like 800k. Looks the like the gov (you and me) are going to gag down all those overpriced California mortgages after all. New game! Market to the moon! I bought Ultra nasdaq 100 today.
I've pretty much decided on buying in early to mid 2009. Looks like I'll be getting a smoking deal.
Thanks to all you sucker homedebtors who listened to scumbag mortgage brokers and realtors on commission. I'll be buying your house next year for 50% off what you paid for it when you "bought."
You buy in early to mid 09 you will be a sucker homedebter just like the ones your trashing as it now your just an ignorent dumbass. This shitball has barely started rolling downhill. By 09 it will be at speed. Good luck finding an investor for mortgage money who will be willing to accept collateral that is rapidly depreciating in value. Of course if you have rockstar credit 40% down they may take the fisk for 20%. Keep your money in your pocket until Shillers index tells you its bottomed and shows a trend upward (or more likely a flatline.) To maney tools like you made mistakes and buried their innocent families.
Then I moved to California (with a bit of apprehension, I'll admit). I quickly discovered that real Californians don't leave the state and are a completely different breed from the phonies, white trash, and illegals who move to dusty Nevada and Arizona.
You got armegeton rolling down on you. You can afford it. Baby you don,t know what taxes are yet. You will, your to young and stupid (wanna be rich) to remember a 70% tax bracket. Think escape from LA the movie. Only its going to be escape from Cali. You puffed up toad. Balloning budget deficets what a joke. When the illegals start getting pissed about their freebees being cut off you better start carring a m-16. Good luck, you,ll need it. PS The rest of the US isn't going to bail out you real Cali liberal tools, no fedral aid for you elites who can afford to live there. Enjoy feeding and housing the 5 million illegals that will be left with you and the other guy. Rad baby.
Here's a guy who is going to foreclose on his current place as soon as he closes on his new (affordable?) place.
Foreclosing is going to be the norm for anyone who bought/overpaid in '05/'06..
Maybe it is smart for the lenders to make personal contact with all their borrowers to see if they can work something out, because this is just the beginning for Cali...
http://tinyurl.com/2dqgbf
Readings your postings is hysterical. Alot of humor out there. This is the problem in Cali: IMO, we're looking at entering a near 1930s era Depression. The entitlement pension crowd (law enforcement/teachers unions/prison guards/firefighters -- sorry, I really like firefighters, you're good guys, but part of the entitlement crowd none-the-less), is BK'ing Cali. Schwartzenegger is in a no win situation. He can't raise taxes to deal with our $16B deficit -- because that will REALLY cause a mass exodus of CA based businesses. The local munis & counties have been relying on all of that property tax money to pay for the entitlement pensions + infrastructure. Homeowners are defaulting not only on their morgages, but on property taxes. Hello, bankrupt municipalities. The OC board of Supes is desperately trying to cut entitlement pension benefits (as did SD), and law suits are in the works. There are no winners here -- the party's over, now one huge hangover & the alka seltzer only a temporary relief. The LA times reported recently that for the first time in decades emigration has surpassed immigration (don't know if they included the illegals). Once business bolts at unprecedented percentages, we're pretty much done for, IMO. With respect to local govt. -- am expecting a decline in services (trash/school programs/fire & law enf.). It will truely be the gated communities vs. overall decay & decline. This ain't the same state my grandparents helped build, back in the '40s!
When I lived in California (up to around '97) rents in crummy apartment buildings in crummy neighborhoods like Santa Ana were almost as high as rents for nice apartments in nicer neighborhoods like Newport Beach and Irvine. The difference was that the nicer places enforced zoning laws, did credit checks, and had lots of "rules" (e.g. no beach towels drying on the balconies, etc.) while the apartments in Santa Ana would let you move in 20 of your Guatemalan cousins if you wanted to. Illegals could afford to pay high rent on crummy apartments and rundown houses because they were splitting the rent among a number of people. If Congress really does close the border and start sending people back, rents in California could freefall.
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