Comments for Escondido House: Over 80% Off Peak Price
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CRbot Sun Mar 22 10:24:54 2009 CDT #
bearly says:
Why did a lender lend 470,ooo in 2005 ?
bearly Sun Mar 22 10:26:09 2009 CDT #
dryfly says:
Why did someone pay $469,000 for this house in 2005? Amazing. - CR
Because as everyone knows - real estate only goes up.
dryfly Sun Mar 22 10:29:51 2009 CDT #
reptillian says:
This price will be a new "comp" for the neighborhood, right?
reptillian Sun Mar 22 10:30:46 2009 CDT #
burnside says:
Why did someone build this house in any year? Oh, you knew I'd say something like this, do admit.
burnside Sun Mar 22 10:32:49 2009 CDT #
fried says:
I'd like to see these price reductions in the NE. In Vermont and NH, it's vacation property that seems to be building the inventory...though asking prices are still at the wishing level.
fried Sun Mar 22 10:38:32 2009 CDT #
Anonymous says:
Why did someone pay $469,000 for this house in 2005?
Why did somone pay over $55 for C in 2007?
Anonymous Sun Mar 22 10:39:15 2009 CDT #
DILBERT DOGBERT says:
Simple answer to a not complex question: FRAUD!
DILBERT DOGBERT Sun Mar 22 10:43:00 2009 CDT #
JD says:
Probably. I have observed dozens of such inflated price sales, that upon investigation were not even listed on the MLS and the buyer got 100% financing.
Parent Post
JD Sun Mar 22 11:15:02 2009 CDT #
nova says:
Ah, Actually that would be a good price, depending on location, in No. Virginia now.
nova Sun Mar 22 10:43:10 2009 CDT #
Michael says:
Ha to bring this over from the previous thread.
M says;
Another good post....but congress couldn't be bothered to figure this out, and if they know about it, they know the citizens wont, so they can profit themselves from increased campaign contributions from the banks, etc. and say to taxpayers, "look we solve the problem..the banks are profitable.....sorry about the 700 billion, but it was necessary and it worked"
Post.
"Zero Hedge:
Sunday, March 22, 2009
The Amazing TALF Bait And Switch
Posted by Tyler Durden at 2:14 AM
The greatest bait and switch of this generation in all its visual splendor. As a result of the TALF's non-recourse nature, a hedge fund X can buy Bank X's MBS Portfolio which is marked on the bank's books at 80 cents on the dollar (but has a market price of 20 cents) for the marked price with a 3% equity check and TALF filling the balance. A day later, Bank X repurchases the portfolio from hedge fund X at the 20 cent market price, pays a $5 million fee for the "trouble" and waits for the portfolio to appreciate to 50 cents on the dollar by 2014. Hedge fund X takes a 75% loss on its nominal equity stake but more than makes up in transaction fees. The TALF portion takes a 75% loss with no recourse and no margin to fall back on.
As a result Bank X takes no writedown now, and in 5 years may book an equity profit of as much as $25 million (net of transaction fees paid to the Hedge Fund X), while Hedge Fund X books a profit of $3.2 million for one day's work...
Lastly the U.S. taxpayer loses $54.3 million on a $77.6 million TALF Investment, or 70% (net of 5 years of interest income).
Note: the maximum TALF size is $1 trillion. Will U.S. taxpayers suffer $700 billion in losses from the TALF? Ask your congressman."
So call your congressman about this (202) 224-3121"
Michael Sun Mar 22 10:48:23 2009 CDT #
Poor & Unemployed says:
You forgot to account for the fees charged by the investment bankers and Lawyers, all of which including Staff bonuses, which will be charged back to TALF.
How much money OBAMA spent to get elected??????? *DONT_KNOW*
Parent Post
Poor & Unemployed Sun Mar 22 17:19:44 2009 CDT #
dryfly says:
Why did someone build this house in any year? Oh, you knew I'd say something like this, do admit.
Elitist!
[/snark].
BTW - I've seen WAY uglier and less utilitarian than that. That is what drives me crazy as I go around the country & see stuff... it isn't the lack of 'taste' that bothers me as 'taste' is only in one's mouth... it's the lack of 'functionality' I see... houses built without any consideration of where they are situated & the plus/minus that site & location offer up. I see horror stories almost everywhere - I wonder what it would be like to live in the houses... then compare those monstrosities with somebody who 'gets it' - who built & modifies with consideration of where they live and how they live. The difference is black and white.
dryfly Sun Mar 22 10:49:52 2009 CDT #
Tim Geithner\'s Mom says:
"Why did someone pay $469,000 for this house in 2005?"
They were hoping to sell it for $569,000 in 2006?
Tim Geithner\'s Mom Sun Mar 22 10:50:14 2009 CDT #
Furrner says:
I am a furrner, will you start giving out green cards to purchase your el cheapo houses?
Furrner Sun Mar 22 10:50:36 2009 CDT #
JimPortlandOR says:
The poor neighbors, wishing to sell at near thier current mortgage balance, just got whacked in comp. prices. They should have bid up the price to save themselves.
JimPortlandOR Sun Mar 22 10:51:17 2009 CDT #
Anonymous says:
How many jobs can a stimulus injection of $1b create according to Gov. Schwarzenegger?
18k-23k or about $50,000 of stimulus per job created
Anonymous Sun Mar 22 10:51:39 2009 CDT #
punditry says:
http://www.militaryfactory.com/military_pay_scale.asp
goodness...i have'nt looked at this chart in ages. both my parents are retired. O6,O8-they clear 17g's a month retired.
xmas better be extra good this year, or else.
punditry Sun Mar 22 10:52:06 2009 CDT #
golfersteve says:
The better question is why do we have to pay for the idiot bank's lending the idiotic $469K to the idiot defaulting borrower ?
golfersteve Sun Mar 22 10:53:07 2009 CDT #
Barley says:
bearly beat me to it! ditto
Barley Sun Mar 22 10:54:32 2009 CDT #
Anonymous says:
Looking forward to see the same "re-valuation" in stocks. (Why should they be priced any more sanely than RE ?)
Anonymous Sun Mar 22 10:56:00 2009 CDT #
Lawyerliz says:
This house would go for 125 to 150k in most S. Fla neighborhoods. It wouldn't in a bad neighborhood.
Ok,it's not so great, but it would be ok if you painted it in nifty colors and did some landscaping.
Lawyerliz Sun Mar 22 10:58:35 2009 CDT #
Broker says:
First mortgage Fannie or Freddie.($417,000) Anyone want to bet?
That's what happens when you mix gov. with private biz.
P.S. You haven't seen anything yet boys and girs. Just wait for condos and commercial. That's where the real fun is going to be.
Broker Sun Mar 22 10:59:33 2009 CDT #
burnside says:
Dryfly, yes, absolutely. You say utilitarian and I'd say suitablilty, but in either case the result is often pleasing in the bargain. I don't think yurts were devised as an expression of taste, but they're actually pretty terrific.
burnside Sun Mar 22 11:02:19 2009 CDT #
Tom Stone says:
I have seen worse places that sold for more at the peak.And I second dryfly's statement about functionality,The odd thing being that I have seen some custom homes on acreage that were unlivable monstrosities,the freakin builder could not even orient the house properly to take advantage of sunlight or views,or place it on the lot in a way that did not detract from the use of the rest of the land.Somtimes I wondered if the builder and architect were blind,stupid and taking bad drugs.These were multimillion dollar properties for god's sake.Your cheapo mass market builder running on speed and bank loans is one thing,the expensive crap is just not explainable rationally.
Tom Stone Sun Mar 22 11:11:31 2009 CDT #
Lawyerliz says:
Form and function.
As my architect daughter would say.
Lawyerliz Sun Mar 22 11:12:03 2009 CDT #
reptillian says:
"This house would go for 125 to 150k in most S. Fla neighborhoods. It wouldn't in a bad neighborhood."
That settles it. S. Fla is overpriced.
reptillian Sun Mar 22 11:13:12 2009 CDT #
michaelangelo says:
That house would still sell in Bothell, WA (20 min north of Seattle) for > $300k.
Parent Post
michaelangelo Sun Mar 22 12:26:08 2009 CDT #
Poor & Unemployed says:
Suppose next to your house!!!!!!!
Parent Post
Poor & Unemployed Sun Mar 22 17:21:36 2009 CDT #
Lawyerliz says:
We went to see a million dollar house in Brevard at
peak, which was build by a builder for himself. It was horrible. Cabinets didn't work together well.
You would have to grow wings to change lights.
You had to walk through a bathroom to get to a nursery.
What was the guy thinking?
Lawyerliz Sun Mar 22 11:14:33 2009 CDT #
Lawyerliz says:
I just don't think it is that horrible. I've lived in much uglier places.
Course none of knows what the inside looks like.
Lawyerliz Sun Mar 22 11:17:13 2009 CDT #
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CRbot Sun Mar 22 11:19:20 2009 CDT #
Rob Dawg says:
Does a listing price reduction of $1.9m compete?
http://www.redfin.com/CA/Somis/2065-E-La-Loma-Ave-93066/home/17135953
At every point on the giant slinky real estate is not worth what people need it to be worth. Needs based pricing is what is driving sales now. If people aren't getting the price they need they give it back to the bank. The bank doesn't care to preserve comps or even break even, just get the price they need.
Rob Dawg Sun Mar 22 11:19:58 2009 CDT #
Anonymous says:
Back in 2005, an apprasier may have appraised this house at $469K and a bank may have lent that amount to a buyer to purchase the house, but the people who purchased it probably had no money in the deal and had a pick-a-pay mortgage with negative amortization, so they were really just renters.
Anonymous Sun Mar 22 11:22:37 2009 CDT #
Anonymous says:
There must be something wrong with me because I don't think the house is that ugly.
Living in a newly built community in Orange County with $800,00 houses that have no yard and neighbors living right on top of you, I appreciate the appearance of space this home has.
Anonymous Sun Mar 22 11:23:28 2009 CDT #
MalibuRenter says:
I can top that. http://www.redfin.com/CA/Palm-Springs/398-W-Palm-Vista-Dr-92262/home/6044258
Peak price $450,000 in 2006. Now $49,900. 89% off.
$36 per square foot in Palm Springs. For the price of one house in Detroit + one SUV you can live in Palm Springs.
MalibuRenter Sun Mar 22 11:26:00 2009 CDT #
dUCKdUCKgOOSE says:
There are lots of illegal aliens in Florida too...
Parent Post
dUCKdUCKgOOSE Sun Mar 22 15:01:22 2009 CDT #
other jim says:
Love the plywood windows. And so close to the river as well.
Parent Post
other jim Sun Mar 22 15:38:05 2009 CDT #
dUCKdUCKgOOSE says:
It was probably bought by an illegal alien with a no doc, stated income teaser loan. They were quite common in CA.
dUCKdUCKgOOSE Sun Mar 22 11:38:03 2009 CDT #
jasuus says:
I wish i could find the person that ended up losing this house. Then I would point and laugh in their face. It would be therapeutic for both of us.
jasuus Sun Mar 22 11:44:05 2009 CDT #
Dobby says:
A couple years from now that house might be worth several billion dollars. Of course, the dollar won't be worth much.
Dobby Sun Mar 22 12:38:45 2009 CDT #
1 currency [yogi] says:
No one paid $469,000 for that house. The seller got the money, the buyer probably lost a little. The bank socialized the rest of the loss.
1 currency [yogi] Sun Mar 22 12:39:58 2009 CDT #
k2163 says:
I feel like a wet blanket, but you cannot determine the FMV of this house by the "back to bene" price here in San Diego. At the foreclosure sale, foreclosing lenders will often bid on their own properties. To save time, the auctioneer (who bids for the lender) tells the crowd of bidders how high they are going to go. The result is that no bids are made and "back to bene" price is artifically low.
Other factors can make a bid low. Including senior liens like taxes.
The real test is what the bank will ultimately sell the property for PLUS any liens the buyers assumes and has to pay off.
The headlines seem exciting though.
k2163 Sun Mar 22 12:45:36 2009 CDT #
Hymns for the Lord says:
Thanks for the insight.
Parent Post
Hymns for the Lord Sun Mar 22 15:19:26 2009 CDT #
RayOnTheFarm says:
"December 2008: $91,000 (foreclosure)"
Too much of that, and property tax revenues are going to implode. Goodbye Escondido, hello Chapter 7 !
RayOnTheFarm Sun Mar 22 13:03:12 2009 CDT #
nocklebeast says:
I Santa Cruz that house would have gone for about $750,000 in 2005.
nocklebeast Sun Mar 22 13:06:06 2009 CDT #
splat says:
When the economy gets back to normal that place will cross $1,000,000 easy !
:-P
Parent Post
splat Sun Mar 22 13:08:31 2009 CDT #
sdbri says:
You do not want to live in Escondido. 110+ peak degrees in summer? Good luck!
sdbri Sun Mar 22 13:41:28 2009 CDT #
Anonymous says:
http://js-kit.com/extra/tiny_mce/plugins/emotions/img/smiley-smile.gif
Anonymous Sun Mar 22 13:44:00 2009 CDT #
wunsacon says:
>> “It was probably bought by an illegal alien with a no doc, stated income teaser loan. They were quite common in CA.
duckduckGOOSE, it's okay to bring up your point a few times. But, I know 2 people who paid $350k for about that much home in SD. They're legal workers with documented sources of decent income. And I know documented workers who paid much more for other homes, all of which are coming back down because they were too expensive at the time anyway (even considering their income).
wunsacon Sun Mar 22 13:53:31 2009 CDT #
dUCKdUCKgOOSE says:
Actually, it's okay for me to bring up my point as much as I wish to. We still live in the USA, and the USA still has a 1st amendment to it's Constitution. I lived in CA for 9 years, and that state nearly bankrupted me. I witnessed illegal aliens being given preferential treatment in the home loan process- no docs, no SS#'s, no credit check, while ALL of this was required of me. It was egregious racial discrimination, and I will not back off from making a point about it. I watched dozens of illegals walk from their houses in my neighborhood, so I did some research on it. Google "realtor itin toolkit" without the quotes...top link. I emailed at least 4 Latino real estate agents who were experts at closing ITIN loans. They were all in CA, and each had over 80 ITIN sales. I then looked up the estimate of illegals living in CA...3-6 million. I then looked at last names in pre-foreclosure listings in CA at foreclosure.com. At least 80% of the last names are Latino...so then I did the math...80%, 3-6 million (10-20%), so possibly several hundred thousands loans were given to illegal aliens in CA. What recourse is there to someone with a loan tracked with an ITIN number, when they can just leave the country? Gimme a break. I'm light years ahead of most people on this.
Parent Post
dUCKdUCKgOOSE Sun Mar 22 20:04:47 2009 CDT #
VHB says:
That house would still sell for 600K in Vancouver . . .
VHB Sun Mar 22 14:26:03 2009 CDT #
Guest says:
"Why did someone pay $469,000 for this house in 2005?"
Not sure, but they should have budgeted more for lawn furniture.
Guest Sun Mar 22 14:36:24 2009 CDT #
Troy says:
the people who purchased it probably had no money in the deal and had a pick-a-pay mortgage with negative amortization, so they were really just renters
Yup -- $470K @ 4% carrying cost is $1500/mo, less than the rent I'm paying now.
Plus the infinite leverage you get on this investment should prices continue to go up, plus the ability to walk away on a no-recourse loan if they go down.
The buyer wasn't the guilty party here, nor were the lenders (lenders are people too), it was both Congress for not being on the ball in keeping the law up-to-date and also the FEDERAL LENDER OVERSEERS charged with the duty of enforcing the law.
Problem was though once the bubble got going it was like riding a tiger and holding it by the ears. You don't dare let go so you're just going to go where the tiger takes you.
Troy Sun Mar 22 15:18:44 2009 CDT #
Escondido_Resident says:
I saw that in the local paper today and was floored. My parents home in the Oak Hill area was bought for $189k. 3 bedrooms, 2 bath with 1500 sq feet. Escondido is going to be a bad place to live in the next couple of years. The city council has no idea what they're doing.
Escondido_Resident Sun Mar 22 16:16:00 2009 CDT #
Anonymous says:
Ok, where the f*** is Escondido? 8-)
I know it's California, but why would it cost more? The official jobless rate is well above 10% in California!!
Home prices in Detroit are like $10K or something, where the situation is not really much worse?!
Frankly, people who are surprised don't understand how deep is the sh*t and have to wake up yet...
Probably we'll see even lower prices allover the coasts and industrial centers!
Anonymous Sun Mar 22 17:02:43 2009 CDT #
Anonymous says:
80 per cent off peak is what Japan burbs have experienced, a good indicator for America's future RE.
Anonymous Sun Mar 22 17:22:58 2009 CDT #
lawn grass says:
Even here in the less bubbly outback of the Midwest people were buying homes on the premise that both adults would remain employed, there would be no divorce, no health problems, the stock market would go up long term- in one year or five-, and house prices would always rise. Well the number of preforecloses and bank owned properties exceed all other home sales at this time. So whatever financial plan these people had, the plan did not use assumptions that match with reality.
This goes beyond people assuming the house value would always rise.
Now think about the effect of the downturn on
sales taxes,
income taxes,
property taxes,
fuel taxes.
Only now is the effect being felt on state and local governments. There will be much contraction in these governments. The ability to raise taxes may not exist. The downward spiral will continue until when home sales are being dominated by sales made because of new job, wanting to move up to bigger home, etc..
lawn grass Sun Mar 22 17:49:38 2009 CDT #
Anonymous says:
Just wow. Escondido is no more than 10 miles from the Pacific Ocean and less than 20 miles from downtown San Diego. Contrary to a comment, the climate is not that bad at all -- July and August have avarage high temps of about 90, but the evenings drop back into the 60s. It is a Mediterranean climate, definintely not a hot desert like the Antelope Valley et cetera. The air quality is good. OK, that house isn't Street of Dreams material, but it's got a yard and greenery and it's 30 years old, not 80. The article says that there are other foreclosures in the same nabe running around $130k. Incredible stuff.
Anonymous Sun Mar 22 18:52:27 2009 CDT #
Simon says:
Looks like a nice house. 70's houses were often well built. We bought our house for $240k in 2000 and sold for 465K in 20006.
Were is the surprise thta is what happened. We now how we know why. We know it will end badly.
Simon Sun Mar 22 18:59:43 2009 CDT #
Anonymous says:
That POS is so ugly, you'd have to pay me to live in it.
Anonymous Sun Mar 22 22:40:28 2009 CDT #
guy77money says:
For the cool plastic yard furniture! OF Course!
guy77money Mon Mar 23 02:10:12 2009 CDT #
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