Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
Equity’s gone for 35% of recent SoCal homebuyers
November 21st, 2007, 12:00 am · 77 Comments · posted by Jon Lansner/O.C. Register columnist
The folks at online house tracker Zillow have a fun new stat. Well, it’s really a sad, new stat: They’ve estimated, by major metro region, how many buyers in the past year (ended in September) that have no equity left in their homes. Here’s a sampling:
• Nation’s worst? Merced, at 72% of past year’s buyers.
• SoCal (LA-OC-Ventura-Riverside-San Berdoo)? 35.4%
• National average? 15.6%
Much of the blame falls on falling prices. Zillow’s Zindex, which tracks the movement of the company’s “Zestimates” of all home values (not just ones that sold) was down 8.6% for O.C. in the year ended in September; down at a 10.1% annual rate for SoCal and off 5.7% nationally. Here’s how O.C. looked, by Zillow’s math as of September, by key slice. Notice that lower-end of market suffers the most …
| O.C. slice | Median | 1 qtr. chg. | 1 year chg. |
|---|---|---|---|
| All Homes | $599,000 | -6.0% | -10.7% |
| Single-family house | $624,000 | -7.8% | -10.7% |
| • Small Size | $460,000 | -13.9% | -19.0% |
| • Medium Size | $556,000 | -8.4% | -11.4% |
| • Large Size | $751,000 | -7.8% | -10.5% |
| • Extra Large Size | $1,519,000 | -3.1% | -5.4% |
| Condo | $418,000 | -8.7% | -10.0% |
| • Small Size | $308,000 | -11.7% | -12.6% |
| • Medium Size | $420,000 | -8.2% | -8.8% |
| • Large Size | $727,000 | -2.7% | -6.3% |
To read more, CLICK HERE
To see how other market trackers see O.C. home-price changes, CLICK HERE
November 21st, 2007 at 2:00 am
FreddieMac, Fannie Mae, Countrywide, Etrade, Standard Pacific, Centex, Beazer, Toll and KB. All on the verge of insolvency. These are failed business models and must be left to fend for themselves. What many bloggers fail to acknowledge is that it is not about house prices. It is a failed system based on a fiat currency and gambling through CDO’s and home loans.
Let capitalism work, rewarding failure will only encourage more of the same. Email the federal reserve, your Senator, your Governor. Do not support any candidate that wants to prolong the misery. Do not support any candidate that believes the debasement of our currency is the answer.
Lansner, I do appreciate the freedom of speech you allow on this blog, but is there anyway you can limit the number of times a blogger can post. Some people have taken over the blog because they are miserable and want other people to join in with them. I enjoy reading intelligent blogs but those get lost when one person chimes in all day long. Thank You.
November 21st, 2007 at 5:41 am
Dear RAT,
It appears that Truthiness has pinned your ears back for you and now you want to limit the number of times they blog. Nothing like trying to skew the rules of debate so as to win the argument.
November 21st, 2007 at 5:46 am
This stat makes sense knowing that the higher end jumbo’s won’t reset in masses until late next year and into 2009.
November 21st, 2007 at 7:03 am
Why do people still think Zillow has any value? The “zestimates” are not estimates. It is computer generated crap and it’s totally unreliable. My next door neighbor’s house is worth over 100k more than mine because of recent sales - it throws everything off. Zillow really needs to be labeled as a “fun” website and they need to trash their “zestimates”.
November 21st, 2007 at 7:20 am
Garbage In, Garbage Out. Zillow results have alwasy been completely worthless.
And I’ll post any damn time I want.
November 21st, 2007 at 7:23 am
(This got held by Lansner - I think for the links, so I pulled them out)
Arthur Jensen, just for you:
(From Barron’s Magazine)
Treasure Hunter
Talking with Scott Amero, Co-Chair, Fixed Income Investment Strategy, BlackRock
“Despite the housing industry’s woes, Amero sees no reason to shun the mortgage-securities market, although he might continue to avoid the subprime end of the market and concentrate instead on buying highly rated tranches of securities that have qualified for Fannie Mae or Freddie Mac guarantees. Beyond that, he sees opportunity in so-called jumbo-mortgage pass-throughs: securities backed by mortgages that are too large for Fannie or others to guarantee but where the borrowers have high credit quality. “Those are trading at big discounts, but there is really quite limited credit risk,” he says.”
(On a side note: it’s hilarious that the guy is named “Amero”)
(This story is related to the one above)
(From Bloomberg)
Greed Trumps Fear as KKR Gets Banks to Arrange CLOs (Update2)
November 21st, 2007 at 7:25 am
This statistic is no more “sad” than how many hardworking residents are priced out of homes because of bubble pricing. The statistic I’d really like to see is the affordability statistic CAR used to publish. That number was based on income multiples and conventional loans. A few years ago we were at record affordability lows (maybe less than 10%) whenCAR decided the statistic wasn’t useful because toxic loans were pumping up prices. These days, however, suicide loans aren’t available. CAR has an obligation to tell the truth about what’s affordable.
November 21st, 2007 at 7:35 am
bulwark, saw that you also want me censored. Just for you:
Awwwww, let’s shoot the messenger. If people wish to converse with me it’s none of your business. Crawl back to your bubble blogs where you can have a mutual stroke session all day long.
November 21st, 2007 at 8:11 am
Now the realtor that sold the house for more then it’s worth and the loan company that loaned more then the house was worth are crying same thing happen twenty years ago its called greed followed by karma.
November 21st, 2007 at 8:28 am
Equity gone, jobs gone, but hey we are doing awesome! Did you guys watch the “real” housewives of OC, I mean isn’t that the real life here? I personally can’t wait to see those who are wrapped up in RE on that show have their melt down, they seem to be the typical scumbag pretty people syndrome I run into in the harbors. I ran across this and thought to myself….that is the OC Register blog participants!
http://www.doctorhousingbubble.com/the-foreclosure-story-number-2-136000-a-year-income-to-foreclosure/
Tell me that isn’t the nail on the head with some of the people posting on here, and not to mention validates what we believed to be the perception int he County. People believe it or not are barely waking up to this reality of the current demise of the industry and the dollar and et all issues. I guess that is their plan, try and keep the masses busy trying to play catch up with their hyper spending - and keep their minds off the important stuff until it is too late.
November 21st, 2007 at 8:34 am
It would be a start to limit people(ken) to just one name. Then at least I have a fast idea what the context of the persons comment will be. Ken why don’t you discuss this idea amongst your many names.
Perhaps you all will come up with a novel solution.
November 21st, 2007 at 8:35 am
It’s not over, folks. There’s plenty of pain left to come for homeowners and investors already battered and bruised by the subprime-mortgage meltdown.
The cheap and easy money is gone, but the inflated prices it created are still here.
November 21st, 2007 at 8:43 am
“bulwark Says:
November 21st, 2007 at 7:25 am
This statistic is no more “sad” than how many hardworking residents are priced out of homes because of bubble pricing”
What you meant to say is its sad that so many bubble blog vulture speculators are priced out of homes”
November 21st, 2007 at 8:51 am
Zillow??? What kind of source is Zillow. Zillow is unreliable & inacurate!
Blogger, you should do your home work before you spew false data!
November 21st, 2007 at 8:51 am
truthiness we know youre arthur too HELLO just post under one name and be done with it…. recessions are good
recessions are a part of capitalism…. they purge the
system of mistakes and imbalances if we dont get a
recession soon we will get a depression later and heres
why…
http://www.marketwatch.com/news/story/seventeen-reasons-america-actually-needs/story.aspx?guid=%7B08D803FF%2D60CE%2D4868%2DBDB8%2DD0CFFE9851B0%7D
November 21st, 2007 at 8:58 am
Truthi,
You can post all you want………..the more you post the more we realize what a fake you are. If you really believed that the housing market was going to turn up, you would be buying properties. If you really believed that there was a 100 % financing that was affordable, you would be getting it to purchase homes. The fact is you are not buying homes now……you are only trying(hoping) that others will buy.
Put your money(if you actually have any) where your mouth is…….
Time to buy truthi………….right now, go out and get a few of those bargains.
November 21st, 2007 at 9:12 am
So, any post with a link it is has to be reviewed? Not the best system…
November 21st, 2007 at 9:13 am
Right nano, I’ll go out and buy another house I don’t need just to satisfy you. It’s people like you that make me so happy that the loan workouts are coming. I don’t want to see people like samson (and even mav) hurt in any way, but you are another story. I hope you get nothing at the end of this story. It’s not looking so good for you right now. Workouts are here. Wall Street investors are here (see above). Day by day the situation improves:
(some highlights)
Paulson Shifts on Mortgages
Treasury Secretary Seeks
Broad Moves by Lenders;
‘Not Business as Usual’
WASHINGTON — U.S. Treasury Secretary Henry Paulson, concerned that millions of homeowners aren’t being helped quickly enough, is pressing the mortgage-service industry to help broad swaths of borrowers qualify for better loans instead of dealing with mortgage problems on a case-by-case basis.
In an interview, Mr. Paulson said the number of potential home-loan defaults “will be significantly bigger” in 2008 than in 2007. He said he is “aggressively encouraging” the mortgage-service industry — which collects loan payments from borrowers — to develop criteria that would enable large groups of borrowers who might default on their payments to qualify for loans with better terms.
The momentum for a new approach received a boost yesterday when four major mortgage-loan servicers, including Countrywide Financial Corp., and California Gov. Arnold Schwarzenegger agreed to endorse a plan for temporarily freezing interest rates to help borrowers in good standing from facing foreclosure when their loans reset to higher interest rates.
He also called the Senate’s failure to pass legislation overhauling mortgage giants Fannie Mae and Freddie Mac “very frustrating,” saying that the two government-sponsored entities need to be playing a bigger role in the housing market.
Mr. Paulson wants Congress to temporarily allow Fannie and Freddie to purchase mortgages larger than their current limit of $417,000, a move some believe would improve the availability of the larger “jumbo” mortgages.
November 21st, 2007 at 9:23 am
Rants,
That was a great article. Thanks. I really like this quote:
“Our values are distorted: It’s OK to be greedy and overshoot the market on the upside — grab too many assets, take on too much debt, make consumer spending a religion, live beyond our means, ignite hyperinflation along the way. Growth is good, even in excess. ”
This is exactly what I am trying to say. Many people tend to focus on one sector of the economy in the case of this blog housing. The problem is that one happens in one sector eventualy has an affect on all the other sectors.
All 17 points in that article make perfect sense. When people are backed in a corner so to speak we learn to adapt and create ways to better our lives. It forces new ways of thinking and ideolgies. The status quo isnt working. The supply side economic trickle has stopped long ago.
It doesnt take much to think back to a few generations to see how much debt our parents and our parents parents carried. Now think to the future. Think of the legacy and what you will pass on to your children and your childrens children. We are becoming like the Roman Empire, and setting ourselves up for extreme failure.
November 21st, 2007 at 9:35 am
Zillow is complete garbage, they listed my neighbor’s house at $300k more than mine because it sold two months ago. And by the way, my neighbor’s house is smaller than mine. How do you explain that?
November 21st, 2007 at 9:38 am
Zillow, what a joke. That site has been inacurate since it launched.
This blogger is really scraping the barrel for stuff to post.
November 21st, 2007 at 9:43 am
“Equity’s gone for 35% of recent SoCal homebuyers”
Well, my mom promised me a real jet plane for Christmas last year, and it never arrived. She owes me $455 million dollars.
November 21st, 2007 at 9:44 am
Property values are still going to come down regardless of home workout plans. And if they dont they will stay stagnant.
November 21st, 2007 at 9:51 am
Rants,
I agree about the article. I like this point:
“We have not seen a nationwide decline in housing like this since the Great Depression, says Wells Fargo CEO John Stumpf. As individuals and as a nation Americans have always performed best in crises, like the Depression or WWII, times when we’re all asked to make sacrifices. Pampering us with interest-rate cuts and tax cuts during the Iraq and Afghan wars may have stimulated the economy temporarily, but they delayed the real damage of the ’90s stock bubble while setting the stage for this new subprime/credit crisis.”
Any attempt to freeze rates will only delay the obvious and actually hurt the borrower more. For example, if they loose their home now the bank will resell it for a 10% loss or something like that. If it gets delayed and the housing goes down another 20-30%, then the bank allows the interest rate adjustment the borrower will be out much more in the future. Believe me, the banks will go after every borrower for the losses and it is very difficult to file for bankruptcy.
Just like the NASDAQ had to go down to a realistis level, so does the housing. What was the NASDAQ in 1998 & what is it now in 2007. It never came back because the fundamentals of a good investment really didn’t change like many thought. You hear comments like “the internet has changed everything”. Guess what, people still only have a certain amount of disposable income. All you can do is shift where it is being spent, so how does that change everything.
The housing will get back to the fundamentals of a reasonable average price compared to the average incomes. It really has no choice. The question is, how long will this drag out? As GS predicted the average home in OC will be around $380k, it really has no choice over time.
November 21st, 2007 at 9:54 am
Truthi,
I am 51 years old, I have two wonderful sons that are becoming adults now, I am a world recognized expert in my profession, I’ve vacationed in the far corners of the globe, I have great friends, I’m starting a new business with great potential, I have enough money in the bank to comfortably retire…………………
Do you actually think I care about the mortgage industry and government bail outs. Do yo actually think that these bail outs would stop the collapse of real estate values in orange county? Is it you that need is to be bailed out? Hope you don’t hold your breath thinking that the politicians in Washington are doing the usual…blowing wind in order to make themselves look good for elections.
November 21st, 2007 at 10:04 am
Yes/Yes/No. It’s a fait accompli.
November 21st, 2007 at 10:11 am
I don’t understand why Truthi wants to hurt the little guy so bad by convincing people that they should take out I/O loans in a time when housing prices are declining. I have written my representatives at the state and federal level to strongly condemn the bail outs which either prolong the inevitable or will result in a tax payer (your money too Truthi) rescue via the GSEs (which really will be a bailout for Wall Street). Should we also bailout the complusive gambler who blows his savings in Vegas because he didn’t understand that you don’t always win?
Truthi, you may think you are righteous but you are trying to perpetuate one of the greatest scams this nation has ever known. The sooner prices come back to fundamentals the sooner the buyers will return.
November 21st, 2007 at 10:16 am
Lansner wont’ be happy until the median home price in O.C. falls to $0. The “Marketplace” section of the paper should be called “Real Estate.” Southern California has a very diverse economy and real estate is not the only industry. The housing market is definitely in a downturn, but people like Lansner don’t help it at all. I am not a realtor or a real estate investor in Orange County. Everyone should just stop reading his column and blogs and instead look for a little objectivity. Tom Pertuno of the Times has a much more balanced approach to writing - and is a much better business reporter than Lansner ever will be.
November 21st, 2007 at 10:21 am
NanoWest
You seem to imply that you have a lot of knowlege in many areas.
Maybe you can tell us what area of expertise you have?
November 21st, 2007 at 10:22 am
Don’t limit yourself to the OC Register, go to Reuters or whatever: the maelstrom of grim economic news is unending — and all because you fools thought that trees will grow to the sky, that 1.6 million was “reasonable” for Irvine tract homes: a reasonableness buttressed on overly-aggressive lending practices that are now haunting our economy. How blind can you be to think this drunken binge of home appreciation was nothing but good news? it has caused a s**tstorm of economic dominoes all falling together: one CDO/SIV/etc. etc. implodes after another, which begets more bad debt and on and on.
Meanwhile, you keep up the charade by denigrating the bearer of bad news (in this case, Zillow). We are still in the initial stages of a long and deep this downturn. And this is a good thing, ultimately, we can then return to building wealth the old-fashioned way instead of the untenable OC way: just buy and sell homes to each other because you are guaranteed to make a killing: the Fed and other shot callers will make sure of that! ha ha ha, stop it already.
November 21st, 2007 at 10:24 am
“I don’t understand why Truthi wants to hurt the little guy so bad by convincing people that they should take out I/O loans in a time when housing prices are declining.”
Bulls are incapable of writing an honest sentence. Even a casual observer of this blog would see that you have zero evidence to back up your accusations. I like it when wild claims such as this are thrown out because it further dimishes the “credibility” of the bear arguments. Everyone’s true colors are indeed being exposed as the comments roll in. I am more convinced than ever of the true motivations of so many here. You all serve your own interests, come what may No one is fooled.
November 21st, 2007 at 10:25 am
paulsen wants “freddie” to come to the rescue??? lloolll
my question is whos gonna rescue freddie lloolll
http://blogs.marketwatch.com/greenberg/2007/11/drilling-deeper-into-the-freddie-fiasco/
November 21st, 2007 at 10:37 am
Zero evidence? I’ll let the jury decide. Fellow commenters?
I believe that I have more than my own interests at heart. If we allow scams like this to be perpetuated then what future is there for America? Are we a nation of scam artists looking for the next rube? If I check my email inbox, it seems that we are. As far as true colors and crediability, my true colors are that I won’t stand quietly while you and your ilk attempt to pull the wool over our eyes and my crediability is that I didn’t fall for the RE ponzi scheme and I’ll spread the word far and wide that until the fundementals come back don’t believe the schills.
November 21st, 2007 at 10:39 am
Wait…did I see that right?
“Bulls are incapable of writing an honest sentence”?
Paging Dr. Freud, patient in exam room 1.
Hee hee.
November 21st, 2007 at 10:41 am
look at this headline:
Nov. 21 (Bloomberg) — ACA Capital Holdings Inc., the bond insurer under scrutiny by Standard & Poor’s, may have its credit rating cut, forcing banks to take on $60 billion of collateralized debt obligations, JPMorgan Chase & Co. analyst Andrew Wessel said.
this is just the tip of the iceberg: we have lived in a make-pretend economy where we just financed the good times — financing that has lifted the economic boats of a lot of wastrels here in OC — I can’t imagine less-deserving souls to receive so much money as the mortgage brokers/title/real estate agents/escrow/whatever crowd that I have met here in OC. Thankfully, the vast majority of them believed in their own BS and thus over-leveraged themselves to the hilt: They will now go down with the ship and live much-deserved poorer lives.
In this make-pretend economy eventually you have to pay back this endless debt or the music stops. and because we could never pay back this debt, that music is stopping — we will now have hell-wages to pay because of your unmitigated greed and avarice. Shame on you scoundrels and wastrels.
November 21st, 2007 at 10:44 am
Hanah
I am an expert an the field of Nanotechnology. If you want to know about small things, I can help you see them………….
November 21st, 2007 at 10:47 am
“Bulls are incapable of writing an honest sentence.’
I totally agree!
November 21st, 2007 at 10:48 am
Tuthi says their’s nothing to worry about, housings just fine but at the same time he’s praying for a bailout.
This blogs turkey is served.
Truthi comes pre-stuffed with artificial additives and 100% filler.
November 21st, 2007 at 10:53 am
The longer people like truthi talk the stupider they become…
……….liar liar pants on fire……..
Truthi is most likely a wanna be Donald Trump that is sitting on a property that she cannot really afford. She hopes that the market does not get any worse because she will end up broke instead of bing the “millionaire” that she though she was.
November 21st, 2007 at 10:55 am
Bill,
Tell me this isn’t the majority of the bulls here?
http://www.doctorhousingbubble.com/the-foreclosure-story-number-2-136000-a-year-income-to-foreclosure/
Since my other post has to be monitored for some reason….let’s see if this goes through.
November 21st, 2007 at 10:56 am
Truthy ain’t no girl: estrogen does not lend itself to braggadocio.
November 21st, 2007 at 10:56 am
Nanowest invented something everyone really needs (a floating hot tub.
November 21st, 2007 at 10:57 am
Truthi totally ignores fundamentals regarding affordability. Like I have said before, all bulls are focused only on the top line pricing and grasp at any stat to keep the make believe of this pricing alive. Get a calculator and focus on what it takes to pay for this pricing. It will be very sobering.
November 21st, 2007 at 10:58 am
Oh and Bulls look at Nasdaq to get an idea of housing for the foreseeable future, an excellent model. Many things are going to change, and it is going to be big changes, and you are not going to have to like it.
November 21st, 2007 at 11:00 am
Shiny
I truly feel sorry for you. It must be miserable living with all of your hatred and pent up resentment especially during the hoilday season. I hope you take take some time tomorrow and give thanks for what you do have instead of wishing for misery and grief for for others. That will be the first step to creating a fulfilling and successful life
BTW the bond market is having a tremendous day today and interest rates are heading lower. Thats something to be thankful for
November 21st, 2007 at 11:01 am
“Bears” is what I meant to say. As for loan mods, I said yesterday it will have limited effect here. Just that it is good for our economy overall. That premise is not accepted here because all are blinded by greed. A simple glance over the recent threads makes that patently clear. You all sound like a pack of banshees. Like any contentious issue from abortion to gay marriage, it’s the shrill rantings of the few that drown out all reason and overshadow the wishes of the majority.
November 21st, 2007 at 11:04 am
…………And a dense computer memory module that stores 1 terabyte of information on a square centimeter, and a probe that can sense nanoscopic thermal properties of materials, and a micorscope system for viewing semiconductor chips……….
The hot tub is great……….. I’ve had the opportunity to soak in 110 degree water, behind my boat in two harbors with my honey at 2:00 in the morning, under a full moon………sipping a fine wine.
November 21st, 2007 at 11:07 am
Aren’t you rich from all those inventions?
November 21st, 2007 at 11:07 am
http://tinyurl.com/ywpkf8
Just check it out, trust me this is what we will see for probably the same duration.
November 21st, 2007 at 11:08 am
Truthi,
To many I am rich, to many I am poor.
I am happy.
November 21st, 2007 at 11:11 am
Patrico,
Yes, this is exactly what the curve for OC Real Estate will look like in about 10 years.
November 21st, 2007 at 11:14 am
Truthi,
There are financial rewards to being an inventor……however, the greatest reward is not financial. The greatest reward is seeing something that you created being used by others………….
As an example, One time I was at a meeting in Southern France and I started talking with one of the attendees that it turned out was using one of my inventions for his PH.D project. I felt great that he was being successful in his endeavors because of something that I had created.
So truthi, what makes you happy?
November 21st, 2007 at 11:29 am
What makes me happy? Living a life filled with compassion and goodwill and devoid of hate and pettyness. The latter is a struggle given what I see here.
November 21st, 2007 at 11:37 am
Zillow “zestimates” are accurate within +/- 50%.
November 21st, 2007 at 11:39 am
Why don’t y’all go out and buy a Happy Meal. It’ll help ya’ll to be more happy since that is the main concern here today. Zillow sucks.
November 21st, 2007 at 11:41 am
I dont see the hate and pettyness. I am not sure what is meant by that.
I think most of the bulls are using good economic fundementals, logic and reason. You have to seperate the emotion from the truth. People will lose their homes! I dont think anyone is wishing it, it is just a fact. I guess some could say people will take advantage of the situation and buy a home from someone who is in distress.
The problem with that is how the got in the situation in the first place. These people that lose their homes wont be sleeping in Cardboard boxes under the freeway. They will easily be able to rent an apartment and save like a normal person and buy again someday, hopefully something they can actually afford. It is a tough and expensive lesson to learn.
I sometimes see it like those banks that prey on the college kids on the first week of school. They give them a T-shirt and a sports bottle with their new credit card that requires no proof of income. The kids go a little crazy and 5 years later they are working with a debt consultant.
Sure the bank is at fault for preying on the youngsters, but they are adults and need to know wha they are signing and getting themselves into. There truly is no free lunch.
November 21st, 2007 at 11:42 am
Boot out the highjackers.
Anyone that purchased between 1/1/2004 and today is a highjacker. They are unjustly occupying wonderful real estate that sane people would purchase only for 40% less. If you purchased in that time frame, still own the home, and if you must sell the home any time soon, you are a big dumb animal. Get out of my house and let it crash. I will be there to pick up the pieces…I and others like me are the rightful owners of OC.
November 21st, 2007 at 11:54 am
Home prices in orange county escalated to unacceptable levels because of greedy real estate agents, mortgage brokers, flippers, and wanna be millionaires. The perpetrators of this scheme did it for one simple reason, to make a quick buck. The game is over now, and prices for homes are falling and will continue to fall until the value of homes are in alignment with fundamentals such as median income.
I have no compassion for those that played a part in this “ponzi” scheme. There greed got them into trouble, and now they hope that someone will bail them out………………
November 21st, 2007 at 12:11 pm
This thread has taken a right turn into the twilight zone. The facts are pending sales up way up, rates are down and dropping fast (despite predictions to the contrary), loan workouts are a fait accompli and exisiting homes are off by just a few percentage points from a year ago.
November 21st, 2007 at 12:38 pm
Arthur Jensen,
Name calling 20 times in one article/blog is not debate. I hardly believe truthi is the only one, but it would be a good start.
November 21st, 2007 at 12:45 pm
Truthiness: There is one thing that I see you stating prematurely: “Workouts are here.”
From what I read - the workouts that are truly in place right now have not had the affect they hoped for and are therefore asking for more.
So - given that your statement “workouts are here” are offered in the context that they will have a reversal effect on the current direction, I think you’re statement is premature. if the current workouts were having an effect - we would read about how they were performing and the effect on the RE market - both nationally and locally.
Now let’s get local. Most of the workouts and deals that I have been reading metrics on based on the research I paid for shows that they are being done in other areas of the country where many loans are within their conforming limits. That is not the case here. So as an investor and someone that prefers real data before formulating opinions, statements that insinuate “workouts (along with other factors) will solve the problem of decreasing home values in the OC” holds no merit. However, I will give credence to “workouts will have an affect on the national level.”
In short - show me the workout metrics for OC and then you will have a debate with someone that appreciates cold hard facts and remains very objective in their opinions.
As for Wall Street looking upon mortgage backed securities as great deals - that’s because they are looking at the low-risk vehicles. Now if you can correlate how that will have direct impact to OC RE values by showing me some general percentages as to where mortgages made in the last 5 years (here, in the OC) would fall within that risk ruler, I would be very open to agreeing with you on that line item.
We haven’t even started on the social implications of such moves. This county has a higher percentage of irresponsible borrowers than most other metropolitan areas. Just look at the metrics for 2006 - both in types of loans used and their performance since - both are directly correlated to many factors and one of which is the application of poor financial judgment. We can discuss that at some later time.
November 21st, 2007 at 12:48 pm
Truthiness, you lie.
Escrows and sales are far below normal - inventory is far above normal and prices are dropping. Rates are up. Way up if one tries to buy that average 700K decent home in a decent area.
Affordability is off big time with the demise of those la-la loans w/ no down.
Loan bailouts are all the talk as many are trying to find a way to profit from this impending greater mess.
Sell that 800K home you bought new last year and be done with it.
No twilight zone, just an emerging from the darkness of a system that had gone into fantasy land.
November 21st, 2007 at 1:02 pm
Truthiness: “The facts are pending sales up way up, rates are down and dropping fast (despite predictions to the contrary), loan workouts are a fait accompli and exisiting homes are off by just a few percentage points from a year ago”
And your prediction based on this is? (please provide a time domain as well) Anyone can reiterate curent events - its the predictions based off of those events that seperate the winners from the losers.
Hey - to test the objectivity of the posters here - maybe we all should throw out our predictions for December and then again our predictions for March. This will expose the extremists, those that prefer to remain objective and analyze facts and those lacking common sense or in stage 2 or 3.
Concerning the actual statements - pending sales are up 16% - if that was up 16% above historical norm I would agree with your description of “way up” - 16% above record lows doesn’t validate “way up” by any means. Rates are down - they have been, they are and will probably go lower. Loan workouts are happening and been happening - I would like to see the impact they’ve had to the OC so far to gage future performance - anyone? anyone?
Gotta get back to work - my 15 minutes are up for blogging
November 21st, 2007 at 1:07 pm
stay at home mom: greed-mongering is not a holiday spirit but you and your ilk are guilty of it: you are all hoping these pathetically-unsupported bubble prices are here for good. You disgust me.
November 21st, 2007 at 1:15 pm
Not buying it, you make me want to kill myself sometimes (I mean that in a nice way). Some of the workout arrangements came in the last 48 hours - give me some time and I’ll get you the “metrics”!
pdu (buddy), sales are up from the bottom, not from a historical average. Same for rates. However, rates are still close to historical lows.
November 21st, 2007 at 1:18 pm
And nbi, I specifically said workouts would be of limited effectiveness in Orange County (for the NACA program). As for the Governor’s program, I don’t believe it has the loan size cap, so I would imagine that could be very effective. I know that you know that I said prices will fall further. I don’t understand why I have to repeat it every hour on the hour.
November 21st, 2007 at 1:24 pm
Sorry Shiny that you feel that way. Life isn’t always the way we hope that it will be. In your case as with many others on this blog you are going to have to work to get want you want instead of taking it away from someone else. Like I mentioned to Sampson, why not try Dallas or another area that offres great employment opportunities and very reasonable housing. Your young why not give it a try instead of hoping that people will lose their homes here so that you can benefit. Go to an area that you can afford you might be pleasantly surprised
November 21st, 2007 at 1:35 pm
Stay at home mom:
as for working: I have many years of that, thank you, and make a handsome income that is substantially higher than even OC norms. unlike your bubble-caused home equity that is now fast vanishing, i earned my ability to make $$. I guess it angers you since I am unwilling to waste my hard-earned cash to support your get-rich-quick dreams of home wealth. I know it must be awful to realize that those late-night infomercials lied to you. get back to munching chips to soothe yourself, you surely fat, flatulent housefrau.
November 21st, 2007 at 3:53 pm
NanoWest Says:
November 21st, 2007 at 11:54 am
Home prices in orange county escalated to unacceptable levels because of greedy real estate agents, mortgage brokers, flippers, and wanna be millionaires. The perpetrators of this scheme did it for one simple reason, to make a quick buck. ”
Nano, something tells me you had an equal hand in this mess and will likely have a hand in the next one. Hypocrite!!
November 21st, 2007 at 5:24 pm
There is a classic risk of serious Real Estate asset deflation in the United States. Inflation is high, the dollar is declining, credit liquidity is drying up real fast. All these factors put serious downward pressure on consumer spending and will push us into a long drawn out recession. That means Real Estate is a goner, if there is currently no demand, imagine in 2 yrs when things are a lot worse in the economy.
November 21st, 2007 at 5:37 pm
So much spin going on here - it’s quite hard to see everyone’s position in the entire melee. I see your point. Here’s my confusion: Nano is someone who has plans on buying low – at least lower than where we are at now – and you state that his plans look like they might not come true and attempt to show why – that in itself is baffling. Now, if Nano is waiting for a real 50% drop, then attempting to even argue that point right now is premature.
This market moves in stages, its dynamic, it moves a bit and people, including the Fed, the Governator, the lenders, they all react and do something a bit different to attempt to have another affect. Then they wait and see how that affect takes shape and so forth.
So far, some changes were put in place, and it’s helped some areas of the country – not many and definitely not the OC. Now plan B is being played. To say what will happen from here with any real accuracy is not possible.
But as an investor and based on the data we do have, we can easily see that a bottom has not materialized. Given where we are coming from (excessive borrowing, double digit appreciation, etc.) and seeing rates are still DAMN LOW there is no way any seasoned investor could look at this market and predict bottom without seeing the affect these changes make over the span of at least a few months. Saving the existing homeowners doesn’t necessarily mean people will start buying again.
Without increasing the sales volume – the selling market will worsen – not get better. They had better address freeing up money for easier lending standards before singing any victory.
Last I read – lenders, even Freddie Mac, are feeling the pain. This market has a lot of inertia on the downside. The numbers are not adding up to a bottom yet – not even close. My point: you guys can argue all day (I think you did) about what the end of this fiasco will look like when the market turns – but I guarantee I can make more money on RE in OC by waiting a bit longer to buy and see how changes settle in before ASSESSING the direction this will take. Right now, the call is not to buy. That is for damn sure.
November 21st, 2007 at 11:34 pm
please note how ken/ truthiness always avoids the articles I post
like the one on the coming recession WHY?…. youd lose and you know it …. the true hypocrites are the bulls they want to keep their
imaginary home equity wealth that they didnt work a damn day for…
now that the truth is becoming more obvious with each passing day
they become more and more belligerent…. after reading their posts
day after day I now understand why we got into this predicament
arrogant greed ..stupidity,,, denial this certainly explains why
the polls dont give the best candidate of all a snowballs chance in hell
of winning … well we are getting exactly what we deserve thanks
BULLS
November 22nd, 2007 at 12:41 am
We are already in a recession and will not be fully aware of it until early next year.
So very few people even know they are already out of the market - no panic has set in and spending continues to out pace income.
The “liar” loan is all but dead and we will see its crashing thunder by late 2008 and into 2009 as the sub prime problem fades and the prime Jumbo defaults soar.
(The “liar” loan is based on stated income and stated assets and it was made widely available to those with a 680 Fico or above. With nothing down you could lie your way to as many houses as your lies seemed remotely plausible. With inflated appraisals the lying got even better. I think we’ll see more jumpers (suicides) next year as it proves to be far worse than this year has been.)
November 22nd, 2007 at 12:47 am
heres another article to ignore
http://www.reportonbusiness.com/servlet/story/RTGAM.20071121.wrparkinson21/BNStory/robColumnsBlogs/?page=rss&id=RTGAM.20071121.wrparkinson21
November 22nd, 2007 at 1:32 am
We are already in a recession and will not be fully aware of it until early next year.
Very few people even know they are already out of the housing market - little panic has set in and spending continues to out pace income.
The “liar” loan is all but dead (though few of the liars know this fact) and we will see its crashing thunder by late 2008 and into 2009 as the sub prime problem fades and the prime Jumbo defaults soar. “Good Credit” was such a farce - paying on time and having a substantial down payment are not necessarily something that go hand in hand, yet this has been the pretended assumption.
(The “liar” loan is based on stated income and stated assets and it was made widely available to those with a 680 Fico or above. With nothing down you could lie your way to as many houses as your lies seemed remotely plausible. With inflated appraisals the lying got even better. We’ll see more jumpers (suicides) next year as it proves to be far worse than this year has been.)
2008 and most of 2009 will be a disaster as whoever becomes president will wish to take the brunt early and get it over (blaming it on predatory lenders and and not on the real culprit - complete lack of fiscal prudence and guidance from the Bush administration all the while the World Bank was screaming for more realistic lending practices - any fool could see that self regulation was nowhere to be seen - is it ever??). We are too broke for tax cuts, gas is not going to take its usual drop with China and India riding the rocket. Our exports are only 12% of GDP and not enough to pull us up. We have no savings and we’ve invested in our Religious Fundamentalists after having been bombed by Religious Fundamentalists, we’re decidedly anti-science, anti-education, and anti-sanity.
The war will top 2 trillion and at some point we will actually become aware of the 60,000 dead and maimed, 10,000 + AWOL and a world of hurt yet to come.
We rode a false economy and we rode her hard - she will not be a sweet ride for some time to come - perhaps 2012 or so.
One bright spot: If a whole lot of you think I’m way off base here, then the rest of the world might pay a very good price for whatever it is that you are smoking.
If it still happens to be made here, we might just find some real growth.
November 22nd, 2007 at 9:13 am
rants, you’re losing it. I read everything you post, including your links. Most of them are very general in nature, or news that we already know, so I don’t always feel compelled to comment. I do appreciate them though.
November 22nd, 2007 at 9:16 am
“they want to keep their imaginary home equity wealth that they didnt work a damn day for…”
You’re full of