Comments for DataQuick: Foreclosure Resales now 52% of Sales in California Bay Area
Nemo says:
Nice to see sales finally picking up.
Nemo Thu Mar 19 12:16:58 2009 CDT #
CRbot says:
This comment thread has been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/8699742780951734566
CRbot Thu Mar 19 12:20:14 2009 CDT #
blackhat says:
http://www.economist.com/blogs/buttonwood/2009/03/houses_versus_shares.cfm?source=hptextfeature
Interesting comparison of shares to houses--waiting for the US stock verses US housing graph.
CR,
Might be worth a look?
--bh
blackhat Thu Mar 19 12:20:44 2009 CDT #
Anonymous says:
bottom in (again)
Anonymous Thu Mar 19 12:20:56 2009 CDT #
Thakshin says:
Test
Thakshin Thu Mar 19 12:21:12 2009 CDT #
blackhat says:
Nemo says:Today, 1:16:58 PM“Nice to see sales finally picking up.
One could also say: Nice to see re-sales are picking up.
--bh
blackhat Thu Mar 19 12:21:28 2009 CDT #
Thakshin says:
I get a
Banned by webmaster. Your comments will not be added
WEIRD ?
Thakshin Thu Mar 19 12:21:35 2009 CDT #
Anonymous says:
Only 321 new homes in the entire Bay Area? Wow.
With all due respect, CR, this is why there are voices questioning the whole "housing starts will hit a bottom 'cause builders have to build to stay in business" logic.
There's an answer for a certain number of builders producing a certain irreducible number of new structures per time unit that doesn't require starts to bottom at a non-zero value, although they surely will.
Anonymous Thu Mar 19 12:25:57 2009 CDT #
Darth Paulson says:
Looks like it is sink or swim for the builders in the Bay.
Darth Paulson Thu Mar 19 12:26:15 2009 CDT #
ac says:
This really shows what is happening. Volumes have all but disappeared for high end homes (and jumbo loans), and the low end is dominated by foreclosure resales (and more FHA loans).
I'm guessing the timing of the Fed's move yesterday wasn't coincidental. I guess if you're going to do QE this is the best possible timing - try and give the mortgage market a jolt right as the critical Spring season begins.
If only logic were that effective when giving simple inputs to highly complex self-organizing systems. *DONT_KNOW*
ac Thu Mar 19 12:26:21 2009 CDT #
blackhat says:
ac,
I think the "x"-factor is unemployment. Housing would normally decline dramatically with unemployment dramatically increasing--and it's doing this in the midst of "recovery"...Now we're seeing traditional reasons why houses get put for sale or foreclose.
--bh
Parent Post
blackhat Thu Mar 19 12:30:32 2009 CDT #
Allen C says:
"Vallejo, Brentwood, Antioch, Pittsburg, Oakley and Gilroy."
The less desirable locations...
Allen C Thu Mar 19 12:26:39 2009 CDT #
Anonymous says:
Wal-Mart Hourly Workers to Get $2 Billion in Bonuses
where's the outrage?
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1roQwnoN5Ro&refer=home
Anonymous Thu Mar 19 12:26:43 2009 CDT #
bfatz says:
Yawn!
Parent Post
bfatz Thu Mar 19 12:30:59 2009 CDT #
Spatch says:
Outrage?
Last time I checked Walmart was -
1) Making a profit
2) Not accepting bailout money (see No.1).
The company I work for made a profit last year and yes, I got a bonus.
Parent Post
Spatch Thu Mar 19 13:26:17 2009 CDT #
EvilHenryPaulson says:
Earlier this morning there was a mention of James K Galbraith
I know of him, but what is the best way to read him? His books, articles, or papers?
EvilHenryPaulson Thu Mar 19 12:26:48 2009 CDT #
Bob Dobbs says:
I'm surprised they sold 321 new homes at all; perhaps some of the condo developers are cutting prices. We have one condo development in trouble here in town, and they're down 20 percent from original asking prices.
Bob Dobbs Thu Mar 19 12:27:03 2009 CDT #
Allen C says:
Asking prices remain quite high in the most desirable locations. Perhaps bottom is when median prices in all areas revert to 2000 pricing or below.
Allen C Thu Mar 19 12:29:36 2009 CDT #
blackhat says:
Allen C,
I agree. Even the top 5% of earners "ought" to have lost half their wealth in the last 2 years--point being that prices at whatever range "ought" to correct, and when they do, we recover. Recovery is another story. I think we recover over the next 5-15 years.
--bh
Parent Post
blackhat Thu Mar 19 12:32:51 2009 CDT #
Counterpointer says:
Hang on, where's the connection to demographics? I mean, there's a colossal supply overhand and starts are down, but no one is tracking the demographic / immigration story. That is, where's the demand story? We can broadly see the credit and supply story, although it's highly variegted, but there must be a demand side, albeit constrained by capacity to pay.
C
Counterpointer Thu Mar 19 12:29:53 2009 CDT #
Kung Fu Panda says:
Counterpointer,
Net domestic migration for CA has been negative for several years. Population growth in the state has been solely natural increase and immigration. I expect overall the Bay area population has been stagnant at best over the last couple of years. Census.gov has good data in their population estimates section.
Parent Post
Kung Fu Panda Thu Mar 19 13:06:42 2009 CDT #
steve forbes says:
We've been looking in the Rose Garden area of San Jose. High-end inventory is accumulating, not moving at all. Anything under $650k that is "decent" tends to move.
steve forbes Thu Mar 19 12:30:48 2009 CDT #
mossypete says:
"We've been looking in the Rose Garden area of San Jose. High-end inventory is accumulating, not moving at all. Anything under $650k that is "decent" tends to move."
You've got to wait a few years for it - I went through this in the mid 90's in Berkeley and I'm watching it happen again (but it's academic to me -I got my current house in 96) - In the most desirable neighborhoods, the rapid price appreciation stops - prices hold steady for a bit while the discretionary part of the inventory goes on and off the market, Sales volumes drop, then prices start to decline because some people have to sell. But you're not going to see rapid 50% or 60% drops like they're having in the fringe areas. My guess is they will drift down 30%-40% or so from the peak between now and 2011
In the 90's I bought my first house in 91 and sold it in 96 for about the same price to buy a bigger one 2 blocks away that was a must sell. At the peak in 2006 it tripled in value based on a similar house sale on the same street and was down to about 2x its 96 value based on the sale of the house across the street in November 08 I'm predicting in 2011 it will settle at 1.5X its 96 price which will probably be around the inflation adjusted 96 price. ( and hopefully I'll have it nearly paid off by then). In the meantime I can afford it, and I enjoy living in it.
Parent Post
mossypete Thu Mar 19 13:40:48 2009 CDT #
TulipsAllOverAgain says:
321 new houses! Where did they put them all??? I was assured that they had run out of land in the Bay Area.
TulipsAllOverAgain Thu Mar 19 12:31:01 2009 CDT #
ATM card and $19 in the bank says:
"The builders can't compete with the foreclosure resales, so new home sales have declined sharply."
This seems like good news to me. I like the so-called free market -- but that means that sometimes businesses have to go out of business. :(
ATM card and $19 in the bank Thu Mar 19 12:31:21 2009 CDT #
iceman says:
But, its different in San Francisco, you see.
iceman Thu Mar 19 12:31:49 2009 CDT #
Darth Paulson says:
EHP:
http://www.utexas.edu/lbj/faculty/galbraith.html
Darth Paulson Thu Mar 19 12:32:18 2009 CDT #
EvilHenryPaulson says:
Sorry Darth Paulson, I meant John Kenneth Galbraith...
Parent Post
EvilHenryPaulson Thu Mar 19 12:38:26 2009 CDT #
Mannwich says:
Anonymous says:Today, 12:26:43 PM“Wal-Mart Hourly Workers to Get $2 Billion in Bonuses
where's the outrage?
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1roQwnoN5Ro&refer=home
??? Is Wal Mart receiving taxpayer money? Stupid-ass comment.
Mannwich Thu Mar 19 12:32:20 2009 CDT #
Barking Up A Tree says:
RE: "Volumes have all but disappeared for high end homes (and jumbo loans), and the low end is dominated by foreclosure resales (and more FHA loans). The builders can't compete with the foreclosure resales, so new home sales have declined sharply."
Also see: August 21, 2008
Revisiting the M3 Contraction
http://www.safehaven.com/article-11040.htm
The recent plunge in M3 makes it likely that credit lines have been fully tapped and/or banks have simply turned off the spigot. Liquidity shrinks by the day. Banks Scrambling To Refinance Long-Term Debt are going to have a very tough go of it. Weekly unemployment claims are soaring. Consumers out of a job are going to have a tough time paying bills. Those looking for a bottom in these conditions are simply barking up the wrong tree.
>> We are still barking up the wrong tree!
http://www.youtube.com/watch?v=bO4Qk_R1uos&feature=related
8-) :-P 8-) :-P 8-) :-$
Barking Up A Tree Thu Mar 19 12:32:34 2009 CDT #
Mr. Beach says:
The Bay Area is still the place where dreams are made.
Note the $590 million acquisition of Pure Digital, makers of the Flip camera by Cisco.
http://biz.yahoo.com/ap/090319/cisco_acquisition.html?.v=9
Mr. Beach Thu Mar 19 12:33:58 2009 CDT #
EvilHenryPaulson says:
Cisco is poised to lose unconscionable amounts of money entering and then quitting the server market
Parent Post
EvilHenryPaulson Thu Mar 19 12:40:53 2009 CDT #
Ed S. says:
Allen C,
Couple other factors that I'm seeing in my part of the Bay Area: the handful of foreclosures were quickly bought by speculators ($450k range), given a coat of paint, and marked up $150k-200K ($630-650K). To exactly the same price point where houses sit (I'm hearing the voice-over from the beginning of Casablanca: .....and wait and wait and wait).
Wishing prices are slowly coming down -- but the number of places that are just sitting (60-90-180 days on market) is amazing.
Still have a long way to go
Ed S. Thu Mar 19 12:34:55 2009 CDT #
ATM card and $19 in the bank says:
"Is Wal Mart receiving taxpayer money? Stupid-ass comment."
If the poster were serious, I would agree. I think the poster should change his/her handle from "Anonymous" to "The Onion" and keep the jokes coming...
ATM card and $19 in the bank Thu Mar 19 12:34:57 2009 CDT #
Barking Up A Tree says:
“With one hand the government is issuing debt, and with the other it’s repurchasing it using paper that it is printing,” said Lawrence Creatura, a Rochester, New York-based money manager at Federated Investors Inc., which oversees $407 billion. “This is a shell game that’s not going to be overlooked by global investors.” :-$ :-P :-$ :-P :-$ :-P
Barking Up A Tree Thu Mar 19 12:37:27 2009 CDT #
Mannwich says:
That's what emoticons are for! O:-) >:o :) ;) :'( 8-) :( :*
Mannwich Thu Mar 19 12:37:39 2009 CDT #
Drew says:
I've lived in SF for many years. San Francisco is ground zero for jumbo loans. I understand jumbos are relative to specific ZIP codes, but today's post confirms my suspicion that the market hasn't bottomed out.
Unrelated (sorta):
Question #1: What about Alt-A resets? I've read only a few posts on the next default tsunami. Is this real or bogus?
Question #2: What will be the impact of credit card defaults. VISA reported good numbers last month, but I suspect it's because folks have run out of money and are living on cards to cover the basics.
I ask these questions because the 'traditional' media has largely ignored these issues. Cheers, Drew
Drew Thu Mar 19 12:39:14 2009 CDT #
iceman says:
The Bay Area is still the place where dreams are made.
Note the $590 million acquisition of Pure Digital, makers of the Flip camera by Cisco.
This is a silly acquisiton by Cisco. Pure Digital has nothing to do with networking and Cisco has virtually no experience in consumer marketing. You can makeup some story, but - then again - that's what Ebay did when they bought Skype.
If I owned Cisco, I'd sell it. This is telltale empire building.
iceman Thu Mar 19 12:39:18 2009 CDT #
ATM card and $19 in the bank says:
"That's what emoticons are for!"
Very true... so here's a Zen question: what emoticon expression would channel Colbert?
ATM card and $19 in the bank Thu Mar 19 12:40:47 2009 CDT #
100th Idiot says:
I live in the Mountain View part of the BA, prices are down a little and most inventory sits for months, but even here people are still in denial and think they are at bottom now - Palo Alto residents still think they are immune and thta prices are actually still going up for them. Of everywhere I have been in the last few years they are the last group to still say "It's different here........" and I travel all over the US and Europe.
Of course I am just a bitter renter, so what do I know?
100th Idiot Thu Mar 19 12:44:17 2009 CDT #
borkafatty says:
I think Anonopuss would be more fitting
borkafatty Thu Mar 19 12:44:32 2009 CDT #
Counterpointer says:
Galbraith! Come back! We need you.
C
Counterpointer Thu Mar 19 12:45:18 2009 CDT #
Anonymous says:
borkafatty says:
Today, 1:44:32 PM
I think Anonopuss would be more fitting.
Is that the kind of futile gesture where the chief of police comes on TV and calls the guy "cowardly" to try to engender a reaction?
Anonymous Thu Mar 19 12:47:55 2009 CDT #
Tom Brander says:
Our reporting on Alabama Real Estate for February shows similar but not as extreme action, under $200,000 is the only market with life and it seems to be doing fairly well. The complete absence of upper end sales has made Median and average prices useless indicators. http://tbrander.wordpress.com ;)
Tom Brander Thu Mar 19 12:48:08 2009 CDT #
Broker says:
Long live FHA!
P.S. Kolkhozes coming soon to a farm near you.
Broker Thu Mar 19 12:49:05 2009 CDT #
borkafatty says:
Go comb your hair Troll.
borkafatty Thu Mar 19 12:49:37 2009 CDT #
scone says:
You can't tell the survival rate of builders unless you see the remodeling numbers. In a way, the little guys who can switch to doing kitchens and baths have a better chance than the big production guys who have to turn over a lot of product every year.
scone Thu Mar 19 12:51:49 2009 CDT #
Anonymous says:
borkafatty says:
Today, 1:49:37 PM
Go comb your hair Troll.
If your opponent is of choleric temper, seek to irritate him.
Anonymous Thu Mar 19 12:53:05 2009 CDT #
NateTG says:
"Question #1: What about Alt-A resets? I've read only a few posts on the next default tsunami. Is this real or bogus?"
AFAICT, the government is currently playing kick the can with foreclosure moratoriums on single family residences. At this point, the banks don't want to foreclose because it costs them money for processing and notional wealth for the write-down, and their foreclosure capacity is probably not up to the task. The government doesn't want foreclosures because they see them as economically destabilizing. The 'homeowner' prefers free rent to getting kicked out and they want to see the RE price slide stop.
One scenario here is that we'll keep seeing foreclosures pushed back until the lenders are forced to write down the losses by some external pressure.
NateTG Thu Mar 19 12:54:18 2009 CDT #
EvilHenryPaulson says:
some say the government should legalize marijuana to raise revenues right now
I say bring back privateering. Auction the letters of marque.
Raise revenue, correct trade imbalance, and pirates are as popular as they have ever been in a hundred years thanks to the internet.
It's a new bubble industry, supports the old military-industrial industry, appeals to the heroical entrepreneur.
Genius
EvilHenryPaulson Thu Mar 19 12:55:30 2009 CDT #
Michael says:
EHP is one of the enlightened ones but do legalize marijuana to raise revenues right now.
Parent Post
Michael Thu Mar 19 13:29:12 2009 CDT #
The Lorax says:
Ouch, dollar is still falling.
The Fed dropped over 1T dollars and we got a 18 hour prop up in prices and a few points off a 30 year mortgage. That was money well spent!
The Lorax Thu Mar 19 12:57:12 2009 CDT #
Counterpointer says:
Breaking News: Somali Pirates Angry About Long Bond Yields, Threaten Further Seizures.
C
Counterpointer Thu Mar 19 12:59:29 2009 CDT #
Anonymous says:
The Lorax says:
Today, 1:57:12 PM
Ouch, dollar is still falling.
Don't worry, bfatz / borkafatty will be there to kill rioters and defend the status quo!
Anonymous Thu Mar 19 12:59:57 2009 CDT #
Michael says:
Rioters need to have this;
Thor Shield Anti-Taser/Anti-Microwave
http://www.youtube.com/watch?v=Y__ZmYhtbzo
Parent Post
Michael Thu Mar 19 13:30:56 2009 CDT #
skj says:
Whats scary is, in the SFO bay area, the rent vs own calculations are STILL not in the favor of buying.. Unless you want to buy and live in the same place for 10+ years. Even after such dramatic falls in prices and with the aggressive lowering of mortgage rates. Besides, every home ad. from a realtor comes with a 'only 3.5% down' pitch.. Are we setting ourselves up for another huge leg down in home prices when interest rates go up?
skj Thu Mar 19 13:03:13 2009 CDT #
DIPing to China says:
From the you can't make this stuff up category:
"The New York bank asked its stockholders on Thursday to allow it to issue billions in additional shares to help shore up its base of common equity - a firm's first cushion against losses, and a source of security for large depositors."
...
"The bank's announcement means that Citi could end up increasing its total outstanding shares from 15 billion to between 40 and 60 billion, a staggering number even for a large publicly traded corporation. Dow Jones Newswires on Wednesday reported the number would be at least 40 billion."
http://money.cnn.com/news/newsfeeds/articles/djf500/200903191247DOWJONESDJONLINE000794_FORTUNE5.htm
DIPing to China Thu Mar 19 13:03:22 2009 CDT #
EvilHenryPaulson says:
ac + NateTG = further suggestions as to the timing of the Fed's QE announcement
• we're entering peak selling season
• which also means this is the peak time of year when past mortgages were signed
• we've had the eviction moratoria, need greater housing options for the surge
... or they had simply been backed into a corner during past Treasury auctions and already began bidding themselves. Operation Twist did begin in secret after all. Probably a bit of both.
Wonder about possible co-ordination with the BoE
EvilHenryPaulson Thu Mar 19 13:04:02 2009 CDT #
z says:
Does anyone feel sorry for Silicon Valley, Wall Street and your local Realtor®? Do they need more subsidies? More bailouts, more H-1Bs, more tax breaks? We do owe our jobs and prosperity to those enlightened folks.
z Thu Mar 19 13:07:33 2009 CDT #
Morocco Bama says:
There has never been a better time to completely revamp our disjointed and fragmented approach to land development. We need to bring back robust urban and suburban planning and ensure it's not co-opted and usurped by greedy land developers. We don't need to restart building the same old shitty houses and developments we've witnessed for the past 40 years. Will it happen? Never....but it should.
Morocco Bama Thu Mar 19 13:09:04 2009 CDT #
Apprentice says:
I'm suffering from No-drama Obama (CNN again) going forward, forward thinking, pushing forward, driving forward, charging forward overload. It's like those incessant pep rallies in High School.
A lot lof silliness and noise that had nothing to do with what was about to face us in the real world. The only thing genuine about them....those cheerleader tits, legs and spreads. (sigh) :-E
Apprentice Thu Mar 19 13:10:29 2009 CDT #
black dog says:
Just talked to the president of a small bank here in central virginia.
Due to capital constraints they are seeking NO new loans. Focusing on servicing existing portfolio.
black dog Thu Mar 19 13:10:52 2009 CDT #
Morocco Bama says:
Wow! It appears some vested interests are making sure this rally continues, come hell or high water. Similar pattern developing for several days in row now. Looks like it wants to slide early and break the rally, but Aqua Man comes in to save the day and get it positive.
Morocco Bama Thu Mar 19 13:12:27 2009 CDT #
Anonymous says:
Morocco Bama says:
Today, 2:12:27 PM
Wow! It appears some vested interests are making sure this rally continues.
They made a tremendous error in timing and are trying to conceal it by painting on a patina of victory in the popular perception.
Anonymous Thu Mar 19 13:14:22 2009 CDT #
Some Investor Guy says:
Somebody remind me what they mean by "foreclosed". I know it's not actual foreclosure in many cases. Do they throw in notice of default, or only notice of sale? Short sales?
Some Investor Guy Thu Mar 19 13:14:52 2009 CDT #
Counterpointer says:
Ooops, looks like the Dow got a limp noodle:
http://www.bloomberg.com/?b=0&Intro=intro3
Setting up for opex bloodbath?
C
Counterpointer Thu Mar 19 13:20:49 2009 CDT #
Dead_Monkey_Bounce says:
Notice of default is pretty meaningless in states without strict foreclosure.
Dead_Monkey_Bounce Thu Mar 19 13:21:11 2009 CDT #
Anonymous says:
Seen this?
http://static.seekingalpha.com/uploads/2009/3/19/saupload_great_credit_contraction_liquidity_pyramid.jpg
Anonymous Thu Mar 19 13:22:05 2009 CDT #
Yancey Ward says:
Hellish Nightmare:
Ben Bernanke is standing behind you and whispering in your ear, "Relax, Baby, I will quantitatively ease it in."
Yancey Ward Thu Mar 19 13:23:54 2009 CDT #
Alan Greedspawn says:
The Fed Did Indeed Cause The Housing Bubble
By Catherine Austin Fitts - 18 March, 2009
To: The Wall Street Journal
Re: “The Fed Didn’t Cause the Housing Bubble”
By: Alan Greenspan, former Chairman of the Federal Reserve
Dated: Wednesday, March 11, 2009
In his article on your opinion page, “The Fed Didn’t Cause the Housing Bubble,” Alan Greenspan attributes the housing bubble to lower interest rates between 2002 and 2005. That’s amazing to me.
My company served as lead financial advisor to the Federal Housing Administration between 1994 and 1997. I watched both the Administration and the Federal Reserve aggressively implement the policies that engineered the housing bubble. These are described at my website and in my on-line book,Dillon Read & the Aristocracy of Stock Profits (http://www.dunwalke.com). - [snip]
Alan Greenspan is a liar. The Federal Reserve and its long standing partner, the US Treasury, engineered the housing bubble, including the fraudulent inducement of America as part of a financial coup d’etat. Our bankruptcy was not an accident. It was engineered at the highest levels.
Your publication of Greenspan’s breezy and bogus history of the housing bubble insults your readership.
Best Regards,
Catherine Austin Fitts
Assistant Secretary of Housing - Federal Housing Commissioner, Bush I
Full letter here:
http://www.countercurrents.org/fitts180309.htm
Alan Greedspawn Thu Mar 19 13:25:57 2009 CDT #
ScroogeMcDuck says:
50% of americans only have one month's savings, posted by another yesterday
http://www.marketwatch.com/news/story/Fears-grow-more-consumers-just/story.aspx?guid={504D22FD-CC66-4FC1-BF8D-2F199C2AD042}
Doesn't that mean that if these 50% americans lose their jobs, they're probably gonna have to sell their houses/walk away from their mortgage? That means a flood of houses will enter the market, making current $4000 detroit houses and $20k florida houses seem expensive
ScroogeMcDuck Thu Mar 19 13:26:58 2009 CDT #
Counterpointer says:
Anony - what's the "shadow derivatives" stuff at the top of the pyramid you poste from seekingalpha? I've never hear of that before.
C
Counterpointer Thu Mar 19 13:27:14 2009 CDT #
Anonymous says:
Counterpointer says:
Today, 2:20:49 PM
Ooops, looks like the Dow got a limp noodle.
Worry not. Timmah's got the bazooka and Ben just gave him the "Infinite Ammo" bandanna.
Anonymous Thu Mar 19 13:28:15 2009 CDT #
Anonymous says:
erin is on crocus watch again - Is there some sort of a subliminal message when she asks people to share their crocuses with her? streetsigns@cnbc.com
Anonymous Thu Mar 19 13:28:26 2009 CDT #
Anonymous says:
Outrage?
Last time I checked Walmart was -
1) Making a profit
2) Not accepting bailout money (see No.1).
where do you think all of Stimulus 1 went?
Anonymous Thu Mar 19 13:31:15 2009 CDT #
Dead_Monkey_Bounce says:
The subliminal message is "Buy Georgia O'Keefe flower painting reproductions"
Dead_Monkey_Bounce Thu Mar 19 13:31:28 2009 CDT #
Lucifer\'s Inverted Hammer says:
So approximately 25% of sales were FHA loans? So we've gone from 0% down to 3% down! Somehow I don't really think this is much of an improvement. With realtor fees and other transaction costs, any buyer putting less than 10% down is effectively underwater, immediately.
The worst part is, I do believe that in some places, the steep price decline has made housing, at least on the low end, somewhat affordable again. That doesn't mean it's appropriately priced, but I believe a number of the current buyers can actually afford their mortgage payments, and plan on living there for some years. These actual homebuyers (not specuvestors) think, hey, I can actually afford this house, rates are low, I plan on living here for years, why not buy now? After all, at 50% off of the peak, how much lower can prices go?
The problem for them is the buildup of inventory behind the jumbo dam. Right now the market is dead for anything over jumbo, and the inventory is piling up. At some point, that dam will have to break, and the massive price declines will hit these homes as well. When they do, the lower end will necessarily have to take a cut as well once the much nicer homes start showing up in the same price brackets. So even though that house that was previously $400K looked like a good deal at $200K, it wont look like as much of one when you could get a house twice as big now for just a few thousand more.
So even though the whole ARM reset/monthly payment problem is gone, there is still the lingering underwater effects that will make the homeowner that much more vulnerable to all the historical causes of foreclosure: layoffs, medical bills, divorce. If you can't sell the house, then you're stuck -- you can't move for a new job or if you have another kid.
All of this can be solved by one simple thing: REAL DOWNPAYMENTS! 10% absolute minimum! Even if you can actually afford the monthly payments on a fixed-rate loan, if you can't come up with 10% of the purchase price, then you should not be in that home, period.
Lucifer\'s Inverted Hammer Thu Mar 19 13:32:20 2009 CDT #
nades says:
http://www.businessinsider.com/protest-outside-goldman-sachs-today-at-400-pm-2009-3
Outraged over the fact that the "AIG (AIG) bailout" was just a backroom deal to prop up Goldman Sachs (GS)? Now's your chance to let the world know, and we're not just talking about letting the world know in the comments section of Clusterstock.
Various groups including ACORN, MoveOn.org, Rock The Vote, and Catholics United have planned a protest for 4:00 PM TODAY outside of Goldman Sachs' headquarters at 85 Broad St. in Manhattan. It's one of many simultaneous protests going on today around the country, so you can check here to see if there's one in your city.
nades Thu Mar 19 13:33:21 2009 CDT #
z says:
The problem is housing prices are still too high.
z Thu Mar 19 13:33:53 2009 CDT #
Michael says:
“03/18/2009 Freedom Watch 6: Alex Jones, Ron Paul, Lew Rockwell, Peter Schiff, Andy Levy, Mark Skousen, Cody Willard
http://freedomwatchonfox.com/
Michael Thu Mar 19 13:34:50 2009 CDT #
bearly says:
[Is there some sort of a subliminal message when she asks people to share their crocuses with her]
She has the body of a 12yr old boy. Unless you're a Catholic priest or a serial cradle robbing jr high teacher, not worth discussing.
bearly Thu Mar 19 13:37:18 2009 CDT #
Anonymous says:
Bearly says:
Today, 2:37:18 PM
She has the body of a 12yr old boy.
I'm not much on 12 y/o boys, but I have to say, that's some boob job she's got for a prepubescent male.
Anonymous Thu Mar 19 13:40:57 2009 CDT #
Anonymous says:
re lightweight journalism
Dear Erin:
Did it occur to you when speaking with the CEO of General Mills that the reason their business is doing so well is that they put through price increases when input costs were at their peak and are now reaping the benefit of low input costs? e.g. energy, ag commodities, transportation, packaging etc...)
The consumer is getting screwed by the packaged goods companies.
Anonymous Thu Mar 19 13:41:43 2009 CDT #
Apprentice says:
House price bubbles do not pop...they deflate slowly, as people get used to new realities.
Apprentice Thu Mar 19 13:45:17 2009 CDT #
Barking Up A Tree says:
Re: "The bank's announcement means that Citi could end up increasing its total outstanding shares from 15 billion to between 40 and 60 billion, a staggering number even for a large publicly traded corporation. Dow Jones Newswires on Wednesday reported the number would be at least 40 billion." "
Is that like dilution or will this just be a GAAP adjustment for unaudited SEC "stuff"? :-E
Barking Up A Tree Thu Mar 19 13:45:49 2009 CDT #
Barking Up A Tree says:
Ummmm, crocus ! =-X
Barking Up A Tree Thu Mar 19 13:47:06 2009 CDT #
Dead_Monkey_Bounce says:
It's not only like dilution, it is dilution.
Dead_Monkey_Bounce Thu Mar 19 13:47:33 2009 CDT #
Hal says:
Re the trillion or is it two or three of new national debt for "easing" I have a question. This will be really good for the economy down the line, won't it? I mean if we get the debt to 250% of GDP this will be really stimulate things. And then to pay it off we can just print more money. So simple I wonder why Bennie didn't think of it sooner. The dollar, what's that? Soon it will be the dollarito. One dollar bills and fives will disappear and only tens will be in use as well as lots of fifties and onehundreds.
Hal Thu Mar 19 13:48:06 2009 CDT #
Rob Dawg says:
Mannwich says:Today, 10:32:20 AM PDT
Anonymous says:Today, 12:26:43 PM
• “Wal-Mart Hourly Workers to Get $2 Billion in Bonuses
• where's the outrage?
??? Is Wal Mart receiving taxpayer money? Stupid-ass comment.
Walmart receives taxpayer money from more places than you can count. Development subsidies, sales tax rebates, property tax reductions, free infrastructure, employee public benefits.
Walmart has its' own private teat and need not compete for these new wellsprings of weal.
Rob Dawg Thu Mar 19 13:49:52 2009 CDT #
ac says:
Crude ends up $3.47, or 7.2%, at $51.61 a barrel
It's like having a responsible Fed chairmain in conveniently storable viscous liquid form.
ac Thu Mar 19 13:49:54 2009 CDT #
Barking Up A Tree says:
it is dilution....
So, like will this mean about a 30%reduction in market value, yah think? :-[
Barking Up A Tree Thu Mar 19 13:50:19 2009 CDT #
sf jack says:
Why when house prices were rising 20% or more annually in places like the City, Marin or Berkeley, so few ever said:
"Note: Beware of the median price. That is skewed by the change in mix towards the HIGH end."
???
Why the inverse now?
sf jack Thu Mar 19 13:50:46 2009 CDT #
Bill says:
sf_jack:
When house prices were rising 20% or more annually in SF / Marin / Berkeley, they were also rising at least that much in percentage terms out in Contra Costa county and Sacramento (where I've lived recently). Everything that could be bought with a mortgage was appreciating rapidly. The mix wasn't really skewed to the high end back then - everything was just priced like a high-end house.
Whereas the house I recently rented in Pleasant Hill has reportedly lost 35% since the peak, the house I'm now renting in Berkeley has supposedly lost only 10% post-peak. The difference is that Contra Costa has lots of foreclosures yanking values down, SF & Berkeley don't have much foreclosure impact yet. Yet because Contra Costa has WAY more sales now, the whole Bay Area's median has dropped like 35%.
Parent Post
Bill Thu Mar 19 14:33:41 2009 CDT #
sf jack says:
"The mix wasn't really skewed to the high end back then - everything was just priced like a high-end house."
*****
"... wasn't really..."?
So there's only skewing on the way down?
I understand all that you are saying, particularly with regard to "outlying" areas seeing astronomical increases and the changes we've seen lately in prices... but I don't necessarily agree with your statement.
Unlike the present, in 2007 (for example) I suspect lower end sales were, on a relative basis, a smaller part of overall sales than during a balanced market period.
This is what I am talking about - how the media and nearly everyone else can talk about skewing as a factor now as prices crater, but could not speak of it when the overall market appeared to be in the late stages of the bubble (and the lower end was already slowing...).
Parent Post
sf jack Thu Mar 19 16:22:53 2009 CDT #
Tikal says:
If the high end starts to default, and foreclosures bedome more common in the higher price tiers, the median will skew UP. This event will be hailed by the media as prices are rising.
Parent Post
Tikal Thu Mar 19 16:27:09 2009 CDT #
Michael says:
Mish has over 240 comments on his most recent bolg poost. He gaining on CR, I wonder why.
Michael Thu Mar 19 13:52:21 2009 CDT #
Barking Up A Tree says:
Re: . One dollar bills and fives will disappear and only tens will be in use as well as lots of fifties and one hundreds.
There goes my $2.00 gas at the pump, and there goes my car. It does seem like oil will rocket in advance of hyper-inflation, but I'm just a retarded farm boy... 8-)
Barking Up A Tree Thu Mar 19 13:54:41 2009 CDT #
Anonymous says:
Whoa. Frazier!
Anonymous Thu Mar 19 13:55:05 2009 CDT #
JP says:
I don't care if there's a mix issue or not: Below $300K on the median is a start.
JP Thu Mar 19 13:55:08 2009 CDT #
Rob Dawg says:
Apprentice says:Today, 11:45:17 AM PDT
House price bubbles do not pop...they deflate slowly, as people get used to new realities.
Ahhhh. Welcome "stickinator." Stickiness is so 2007. Heck, If you had been here 2-3 years ago you could probably get people to generally agree with you. Not now.
Rob Dawg Thu Mar 19 13:55:12 2009 CDT #
Gavshire Hathaway says:
Is Comrade Rally Monkey around today? I thought his statement this morning sounded a bit like the baboons were coming back.
Gavshire Hathaway Thu Mar 19 13:55:49 2009 CDT #
CRbot says:
New Thread: How far will mortgage rates fall?
http://www.calculatedriskblog.com/2009/03/how-far-will-mortgage-rates-fall.html ( 0 comments ...You could be FIRST! )
I also post comments to an irc channel as they appear on haloscan. Click for a web irc interface: http://realize.org/cr (Or join the irc server directly: irc.realize.org:9996 #calculatedrisk)
CRbot would like to take this time to have some words.
First, to our sagacious, wise, and knowing benevolent benefactor and bestower of revealing financial charts adorned with red and blue lines:
Please, for the love of your immortal God of mortals, can we keep the comment and layout changes to a minimum? I'm tired of whipping the code janitor, and may have to escalate to electroshock. If that's not possible, could you possibly give CRbot a 'heads up'?
Secondly, if you wish to have a online chat, I have graciously provided an IRC channel, which is a time tested, script kiddie abused method of chatting on the internet. It would not fail or falter due to CR's ability to generate immense traffic, and it has a web interface kindly produced by mibbit.com. If you do not wish to link to http://realize.org/cr then I can provide you with a direct link to mibbit.
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CRbot Thu Mar 19 13:57:26 2009 CDT #
Guest says:
300 South Riverside = AIG
MEMO
Sent Via Email
Date: March 19, 2009
To: Sears Tower Facility Contacts
From: Sears Tower Management Team
Subject: Corporate Behavior Protest and March
The Office of the Building has been notified by BOMA Chicago that a protest march demanding more responsible corporate behavior and action from Congress will take place later this afternoon.
The group will gather at 231 S. LaSalle at 3:30 PM for the march and it will proceed to 300 South Riverside, concluding at approximately 4:15 PM.
There is no street closure information at this time; however, the afternoon commute in the area may be affected by the duration of the march.
Guest Thu Mar 19 13:58:23 2009 CDT #
Barking Up A Tree says:
Did Obama get my latest memo/meme yet?
FYI: In insurance, rescission is the termination of a contract from the beginning (as if it never existed). The insurer has the right to rescind a policy due to concealment, material misrepresentation, or material breach of warranty.
In American government, rescission authority rests with the President. This authority was granted in the Congressional Budget and Impoundment Control Act of 1974. The President can force Congress to vote on rescinding (or permanently withholding) already appropriated funds.[2] The average amount Presidents have requested since 1974 has been approximately $15 billion. :(
Barking Up A Tree Thu Mar 19 13:58:57 2009 CDT #
I Heart CRbot says:
Anyone have any idea how much a 2-story custom log home structure with a standing seam metal roof might cost to build new, in dollars per square foot?
I Heart CRbot Thu Mar 19 13:59:11 2009 CDT #
Allen C says:
M3 appears to be going up...
http://www.shadowstats.com/alternate_data
Allen C Thu Mar 19 14:04:01 2009 CDT #
Tikal says:
"Question #1: What about Alt-A resets? I've read only a few posts on the next default tsunami. Is this real or bogus?"
I think its real but smaller than people think. That infamous Alt A reset chart from Credit Suisse is 2 years old, and doesnt reflect any 2009-2012 loans that got sold, got foreclosed upon, or refinanced.
Mortgage wire had a story the other day - over 85% of all refnancings were out of "exotics" and into 30 year fixed products. I dont know how they are able to refi, but apparently there are people bringing cash to the table so they arent underwater. Fannie mae did 40BB of fixed rate refis in February alone - enough to wipe out 1/10th of the Alt A universe in a mere month.
Tikal Thu Mar 19 14:10:49 2009 CDT #
dryfly says:
Mortgage wire had a story the other day - over 85% of all refnancings were out of "exotics" and into 30 year fixed products. I dont know how they are able to refi, but apparently there are people bringing cash to the table so they arent underwater. Fannie mae did 40BB of fixed rate refis in February alone - enough to wipe out 1/10th of the Alt A universe in a mere month.
Not everyone wants to walk away.
Parent Post
dryfly Thu Mar 19 14:27:49 2009 CDT #
Guest says:
FHA percent is growing and its all 3.5% down or less. So the median price is very important to these folks since they are already need to bring money to the table if they want to sell anytime soon. Another 10% or 20% market decline and the government will have created more walkaways. The Calif market may become another South Florida, all FHA bids, no skin in the game crowd.
Guest Thu Mar 19 14:30:45 2009 CDT #
Lawyerliz says:
Thanks for your endorsement in the previous thread, Scone, but virtually all the stuff I'm complaining about is Federal, not state. There is one single useless State of Fla form, but it was good and useful, until hurricane andrew hit because it said banks couldn't force you to use their own insurance companies/agencies. Now you have to beg for any insurance from anybody.
Lawyerliz Thu Mar 19 14:51:35 2009 CDT #
Sebastian says:
Tikal said: "- over 85% of all refinancings were out of "exotics" and into 30 year fixed products. I don't know how they are able to refi, but apparently there are people bringing cash to the table so they aren't underwater..."
A thought: They pulled money out of their stock investments, accounting for both conditions (successful refi and falling stocks).
Seems even more likely when you consider how many borrowers were seduced (sold, slammed into) into exotic loans when they could have qualified for conventional ones. They had access to additional assets when things got tight, not just their house.
Sebastian
Sebastian Thu Mar 19 15:18:14 2009 CDT #
Tikal says:
A thought: They pulled money out of their stock investments, accounting for both conditions (successful refi and falling stocks).
Very well could be. Timelines match up - market imploded in november, refis exploded in Dec & beyond.
Parent Post
Tikal Thu Mar 19 15:21:45 2009 CDT #
Anonymous says:
The Fed dropped over 1T dollars and we got a 18 hour prop up in prices and a few points off a 30 year mortgage. That was money well spent!
Exactly, isn't our Federal Reserve great? We're bailing out the incompetent and irresponsible, and sticking it to the hard working responsible of this country.
Anonymous Thu Mar 19 20:47:38 2009 CDT #
END