patrick.net

In moderation, little help please.

StuckInBA,
I have seen so many people chase the price down. In a market like this, the seller should undercut his competition. It's funny how people will give up $50,000 to avoid eating $10,000 on good will.

Typical know it all boomers. Again, they would rather shoot themselves in the foot to avoid someone getting a clean pair of shoes.

Yup, there's the ME generation system of "ethics" at work. Life is a zero-sum game where you win = I lose.

"Very disappointed sellers"

I'm thinking of doing like a "condolences" card for friends and family attempting to list their homes this spring.

"Sorry to hear of your recent misfortune,

in these stressful times if there is anything we can do,

please know you are in our hearts and prayers!

Best of luck selling your home" :(

Mr. & Mrs. DinOR

My brother has a 1989 Ranger pickup with about 200K miles. When he bought a new truck 4 years ago, he tried to sell the Ranger for $3K with no luck. Just a few high-school kids who tried offers of around $800. My brother refused to sell, whining about "nobody wants to pay me what it's worth". He just doesn't "get it" that what it's worth is what someone with cash in hand is willing to pay for it.

It's sitting in his rear yard now rusting away. I'm sure it will be there 10 years from now.

@DinOR,

:lol: Funny thing is, they'll probably take it at face value.

@DennisN,

Your brother ain't the only one who can't 'get it'. I can't even remember how many times I've seen a newspaper or web article about 'house sold for well below fair market value' or 'so-and-so can't find a buyer at any price' --or how many times I've written the author to bitch them out about it. Econ 101 should be mandatory for journalists, IMO.

[Judge] Nowak says, Buffalo began contacting banks "en masse" about foreclosed properties, but "a lot of times we'd just be rebuffed and ignored."

Cooper, as an intern, suggested a tactic that the judge adopted. When banks ignored summonses for code violations, Nowak began entering default judgments against them and imposing the maximum fine, which can reach $10,000 to $15,000. For a big bank, that's not much. The real pain comes because the fines give the city a lien that impedes the banks' ability to buy or sell other properties in the area. In addition, when lenders come to his court to get residents evicted from a particular property, Nowak refuses to grant the request until the bank addresses violations outstanding on other properties. Judge Pianka employs similar tactics in Cleveland. On Dec. 10, for example, he assessed a $50,000 fine against an absentee defendant, Mortgage Lenders Network USA, for 21 code violations at a home.

Now that there's some real, old-school REGULATION. Wish some judges here in the Specuvestor State would open a big can of that on our lenders --starting with the Tan-Man.

HARM,
The funny thing is my brother IS a journalist.

@DennisN,

Egads. Perhaps you can send him some links, like these ones:

http://en.wikipedia.org/wiki/Mental_accounting
http://en.wikipedia.org/wiki/Loss_aversion

HARM,
Did you ever try to talk sense into a "black sheep" sibling?

Citizen HARM, that is quite an article in Businessweek. Not sure that's regulation as much as "creative prosecution". And the million dollar question, what happens to an abandoned property when neither the owner or MBS/CDO wants it...
In 1998, Elizabeth M. Manuel obtained a $34,500 mortgage on the property from IMC Mortgage (since acquired by Citibank). By 2002, the loan had been sold into a securitization trust administered by Chase Manhattan (now JPMorgan Chase) as trustee. It also went into default, and Chase began foreclosure proceedings. In a court filing, Manuel (who could not be located for comment) said she left the home while the foreclosure action was pending. More than five years later, though, the title remains in her name. The house, although still standing, has become a fire-gutted wreck.

In May 2007, Nowak issued a default judgment against Chase for $9,000. But these cases can be notoriously difficult to untangle. Thomas A. Kelly, a spokesman for the bank, notes that Chase sold its trustee business to the Bank of New York Mellon (BK) in October, 2006, and couldn't locate anyone at Chase able to comment. But he reiterates the industry view that Chase can't be held responsible for maintaining a property it never owned. He acknowledges that if a home didn't seem worth taking as collateral, the bank may have made a decision to "just walk away."
Talk about a twisted trail...

@DennisN,

Not a sibling, but other relatives. My sister-in-law bought a high-rise condo at the exact market peak (Dec. 2005), and a niece bought an Orlando house about the same time with a pick-a-payment loan --against my advice of course. My lone success story is a different (SCal based) sister-in-law who (so far) has heeded my warnings and stayed out of the market for 2 years, to her immense good fortune. She is getting lots of pressure from her husband though (so much for the 'nesting instinct' theory) and is showing signs of cracking under the strain.

Whatever happens, don't expect them to ever thank you for "saving them". More likely, they'll blame "people like you" for killing the market.

I’m thinking of doing like a “condolences” card for friends and family attempting to list their homes this spring.(/i>

Along with the syrupy prose inside, be sure to have one of those little greeting card speakers that play when the card is opened. Have the card speak the derisive "Nelson " laugh from the Simson's when opened.

HARM :

The financial journalists are the most unfortunate because their clueless-ness is very easy to point out when the future reveals the hard numbers. Their real clueless-ness is not realizing this fact.

The stock markets were supposed to be cured due to rate cuts. That's what the MSM told us there was a rally. What's the stock market's record after the "shock and awe campaign" ? SPY is down over 5% and QQQQ is down over 2%.

The same thing happened after the dot com bust. The Fed kept cutting interest rates and stocks kept finding new lows. Still you see MSM reporting the same idiotic headlines today. The REIC is at least evil, the MSM is simply pathetic.

he Fed kept cutting interest rates and stocks kept finding new lows.

I don't think the MSM has heard of the concept, "pushing on a string."

Headset,

Nice touch. I like it.

"We were saddened by your decision to sell,

(but understand why)

I suppose we won't be seeing much of you

for some time, what with the projects and all.

Please let us know when you get your life back"

Mr. & Mrs. DinOR

DinOR,

I wrote a little poem you can feel free to use for you "condolences" card:

-------------------------

You put your house up for sale,
Who knew buyers would bail?

After all of that MEW,
You're now feeling screwed.

You thought you were house-rich,
But ain't leverage a real bitch!

So it's time to foreclose,
And our local comps are all HOSED!

...

F-U, you damned FB!

I have a friend whose brother had invested/speculated and currently holds about 10 properties and creditors have started to hound. I have been talking about bubble with my friend for a long time and he did tell me his brother was taking steps to sell off some of his properties. Apparently he was surprised by how quickly market changed.

I have dealt with a few financial journalists, including those from top journals like Fortune, Forbes and WSJ. They are still green, but nevertheless get the by line with their name attached to the article, solo.

Most of them are, well, not that sharp among their peers. Unless you climb to the top and become a columnist, or anchor, journalists make very meager salary even for WSJ, this lady was complaining about her pay all the time, I got a sense that it was not much more than $50K, living in DC, and yet due to her line of work she needs to mingle with those for whom money is not an issue. She later quit and joined a lobby group. Given the huge discrepancy in financial reward, naturally, the sharpest all went into Wall Street, not WSJ.

Back when pay discrepancy was smaller, it was much easier to recruit talented journalists who worked for job satisfaction. Now it is getting very hard, because any talented person knows how to do simple financial arithmetics. I know of several young journalists from the top financial pubs who saw their positions as a transition into business school or law school which led to serious $$$. The churn in the industry was quite high.

It took me a while to figure out MEW means Mortgage Equity Withdrawal, for the longest time all I could think of is the sound a cat makes when when it gets screwed lol!

skibum :
You thought you were house-rich,
But ain’t leverage a real bitch!

OUCH ! LOL !

sa :
Apparently he was surprised by how quickly market changed.

That always cracks me up. Even the stock market doesn't change on a dime - there is always time to get out and minimize your loss OR protect whatever gains there are - as a trading strategy.

RE cycles are so much slower. Anyone who wanted to sell had all the time in the world to do it. To me this was nothing but slow. It has taken almost FOREVER for borrowers, lenders, policy makers and everyone involved to come to their senses. And they are still trying hard to avoid coming to their senses.

Quickly my foot.

Many a time I have had a laugh and even sent emails out with links to these stories where the 'experts' are stunned things turned so quickly. My favorite quote are things like "Who could have guessed things could turn so ugly so quickly?"

Hmm, maybe if you guys had been open minded and hadn't ridiculed everyone with a different opinion maybe it wouldn't be such a surprise.

Good News

Starbucks Replaces CEO With Chairman

Starbucks Replaces CEO Jim Donald With Chairman Howard Schultz, Plans to Close US Stores

SEATTLE (AP) -- Starbucks Corp. fired Chief Executive Jim Donald on Monday, handing the reins back to Chairman Howard Schultz as part of a major restructuring initiative aimed at pulling the company out of a downward slide.

The move, coupled with plans to close some U.S. stores and slow down opening new ones, comes as the world's largest chain of coffee houses has seen its stock plummet 50 percent over the last year amid declining traffic in its domestic stores.

Better News

Paulson: No Easy Answer to Mortgage Woes
Paulson Says There Is No Simple Solution to Housing and Mortgage Crisis

Paulson called the current housing correction inevitable after what occurred during the five-year boom in which sales and prices climbed to record levels.

"After years of unsustainable price appreciation and lax lending practices, a housing correction is inevitable and necessary," Paulson said.

He said that the correction was taking a toll on the economy that would continue for a period of months.

"It will take additional time for markets to regain confidence," Paulson said. "The overhang of unsold homes will contribute to a prolonged adjustment and poses by far the biggest downside risk."

Best News

Citigroup could axe 32,000 workers to stem lossesSuzy Jagger in New York
Citigroup is expected to cut up to 32,000 jobs to stem rising losses.

The world’s largest bank could lose 10 per cent of its workforce when it unveils full-year results next Tuesday. It is also believed to be considering the sale of non-core assets to raise capital.

However, Meredith Whitney, one of Wall Street’s top banking analysts, said that the only way Citigroup could repair its balance sheet would be by selling Smith Barney, the broker, for about $25 billion (£12.7 billion).

Ms Whitney, an analyst at CIBC World Markets, told The Times: “In these markets banks can only sell their best assets. The sale of non-core ones would not be material enough.

“To really reduce their leveraging, Citigroup have to sell a chunk of their mortgage or card portfolio, but there is no market for those assets. The only asset they could sell of any size is Smith Barney.”

StuckInBA Says:
When he heard our offer, he looked exasperated. He openly said, “They are not going to like it. They think prices are going to go up in the spring”.

If you don't mind telling us which house this was, I would be happy to make a 25%-off offer next week, followed by a 40%-off re-offer in the Spring. :-)

sa said:
Apparently he was surprised by how quickly market changed.

I would phrase it differently: "Apparently he was surprised by how much time he wasted in denial."

“After years of unsustainable price appreciation and lax lending practices, a housing correction is inevitable and necessary,” Paulson said.

In other words, all of Paulson's cronies have now closed their long positions and taken a short-posture on housing and mortgages.

Welcome to the dark side, you bastard, even if you are still doing it for your buddies.

Guys, another data point personal observation. Gilbert, AZ seems to be back to 2001/2002 pricing. The reason I know this is because one of those 1st time 'real estate investors' who thought I was nuts when I cautioned him about the market in 2004 had told me what he paid and what his house was worth. His single level 4 bedroom house with a cracked slab was worth in the high 200s at the time. He had paid high 100s in 2002. Now, a nicer house is listed for $185K in his area, and a few more are listed under 200K. Just 6 months ago they were asking 240ish for those houses. Prices seem to have snapped back.

PermaRenter,

Now that McD has started marketing McCoffee products, SBUX will loose the aura of exclusivity and go down the drain.

An interesting question is, what will be the next fad....

Also in the news, Bush is rattling his saber against Iran, based on the supposed provocation in the persian gulf.

Here's my question: Where is the Navy video of what happened and where is the tape of the supposed radio threats? I would like them to be published, analyzed and authenticated.

justme: the tapes are still in production; apparently there was some problem finding anyone who speaks farsi.

Shoot first, ask questions after you can find a translator?

Requiem,

They already had a translation that indicated a threatening radio message.
But now they need another translator for the msesage. Sounds fishy.

By the way, where did you read that they needed a translator?

I didn't, I'm just making snarky comments about how easy it is to release a "translation" but it takes some time to make the original if you can't find anyone who speaks farsi /and/ passes the political loyalty tests.

/joking

Ah, requiem, you were way ahead of me. Sorry.

I'm also waiting to see some "production values", as they call it in Hollywood.
:-)

Malcom,

I've also noticed LV flirting w/ 2001-2002 pricing. At peak 185k would not have purchased a "repartment". Now it's a 1,600+ sq./ft. SFH! Like yourself, I spoke w/ a great many people that scoffed at the notion they would EVER be revisiting this pricing model.

Additionally NV has done away w/ stated income loans and this has accelerated the process. What has surprised me is Palm Springs prices seem to be holding up quite well? Any local observations from the SoCal crowd?

skibum

I'm still around. Not lurking often, but I scan the blog a couple times a month or so.

I'm on extended mental break from the housing crisis. We're still renting and preparing to escape our current McMansion rental for something more comfortable that will take us through 2009/2010 if need be. Home prices here in Marin aren't budging much, and foreclosures aren't helping much yet. I follow PropertyShark and ForeclosureRadar pretty closely, but anything halfway decent gets snapped up by some realtor-investor somewhere and relisted at a bloated market price.

I spent a few weeks wrestling with realtors on Zillow's forums mistakenly thinking that would serve as some form of free anger therapy. Instead it just proved to me that we're doomed. The level of ignorance among the realtor-set demonstrated there is astounding. More distressing is the willingness of "normal" people to listen to them over folks like those who read and post here. I get a headache just thinking about some of the tripe that passes over there...

I'm planning to relaunch my blog in coming weeks, but it will probably be taking on more of a software industry focus and less of a general economic rantings vibe. I'm hoping to unload the remaining realtors and second life cultists who thrive off of sending me monthly hate mail...

...and most importantly, happy new year to everyone!