patrick.net

Really pissed me off. When will this crap end?

http://ml-implode.com/

...and don't forget, as each toxic loan peddler goes out of business, the remaining peddlers have less competition so they can afford to raise rates.

Anyone know how to tell if you’re dyslexic? That’d explain a lot of things….

Dyslexic is a sign of genius because you are thinking faster than you can talk or type.

Merge zones usually look smaller than they are. You can look at the satellite map of that area.

http://tinyurl.com/33cbed

But I advise extreme caution in all merges.

…and don’t forget, as each toxic loan peddler goes out of business, the remaining peddlers have less competition so they can afford to raise rates.

They may have to raise rates just to sell those mortgages on as Wallstreet is waking up to the subprime risk.

s/Dyslexic/Dyslexia

…and don’t forget, as each toxic loan peddler goes out of business, the remaining peddlers have less competition so they can afford to raise rates.

They may have to raise rates just to sell those mortgages on as Wallstreet is waking up to the subprime risk.

Yes, that too; but the reason they lowered their rates so much in the first place was because they had so much competition that they figured they would make it up in volume by lowering their standards. Now that they are dropping like flies they are losing their competition; should become very interesting this spring.

I don’t pretend to actually understand the advantages of a roundabout/rotary. We have a good number of them in Boston near where I grew up.

MtViewRenter,

I bike to work nearly every day, including back when we were living in Boston. Imagine trying to make it through rotaries on your bike in a sea of Masshole drivers!

The particularly scary ones for me were the one just on the Cambridge side of the BU bridge and the one on JamaicaWay as it splits off to Centre St.

Hey HARM,

I would have to agree that Patrick and Ben were before there time in one sense, they put up these websites. However, the fact so many people were attracted to them from the outset, whether they were labeled JBRs or not, shows that there was a lot of public opinion already forming around the idea that housing prices were insane and unsustainable.

I got hurt in the stock crash around 2000, and it just seemed so obvious to me since 2001 that money had flowed by the boatload into real estate, that maybe used to be somewhere else, like the stock market.

I'll admit, my understanding of economics is somewhat limited. Anyway, for that reason, plus the craziness of prices jumping here 30-40% per year, I just had to believe that there would be some kind of opposite reaction.

So I don't know if Patrick and Ben are geniuses, but they certainly tapped into the zeitgiest, or spirit of the times, if you know what I mean.

NV :

I don't see the meltdown. The DQ news SJMN page actually shows good gains for both SC and SM county. Some zip codes are quite down, some are doing extremely good. It's kind of weird. What's with Sunnyvale ? 3 zip codes are up over 10% ? Must have been the new homes.

SFBubbleBuyer Says:

> Here’s a distress sale in Saratoga. They’re trying to get
> 950,000 for the property, and if you look back at zillow,
> the property was last bought in 2000 for $750k.

The title records say that the current owner Shahin Jahanbani bought the place from Jason W. Frankenfield on 4/8/05 for $1,050,000

> They won’t work with any other realtors, which says to me that
> 950K is just about the least they can accept while getting out
> from under their mortgage, which suggests 920K in debt.

They suppressed the purchase price and total debt from the title records. I was able to back in to the purchase price at 98% of the 2006 tax bill (in CA under Prop 13. the assessed value goes up 2% a year.

Median prices can go up while house prices go down as buyers who 'stretched' in their brains what they would have to spend to get a decent house see houses they couldn't afford now drop down into their 'top' price range. Instead of buying the same house they could have bought in 2005 for 60k less, they buy the house they couldn't have afforded in 2005.

It's a whole NEW class of people who could easily go underwater if they don't drop 20% down. When will they 'graduate' back to being renters?

Instead of buying the same house they could have bought in 2005 for 60k less, they buy the house they couldn’t have afforded in 2005.

That is very reasonable indeed, considering that most people feel that they could not afford what they need.

I prefer to spend less if at all possible. I still want to enjoy sushi as a homeowner. :)

The title records say that the current owner Shahin Jahanbani bought the place from Jason W. Frankenfield on 4/8/05 for $1,050,000

Ouch. If only he'd waited 2 more months he could have nailed the peak for sure!

So he's only losing 13%ish (with fees) in a year... plus the interest paid.

Peter P said :
That is very reasonable indeed, considering that most people feel that they could not afford what they need.

That's a pretty good point. In fact, I told my wife if we were going to buy in a bubble (especially a deflating one), it'd have to be a house we'd stay in for at least 10+ years, preferrably 30+, so we're only considering houses good for kids even though we don't have any yet. I might buy the most house I can afford even with a slump in prices if it was a house I was sure I wouldn't have to leave. Hopefully most of the people buying now are doing the same thing. I'd hate to think of buying now and having to move in 5 years.

I’d hate to think of buying now and having to move in 5 years.

Not unless prices double again in 5 years. ;)

Ceo of Toll Brothers say worst is over

D.R. Horton CEO: '2007 is going to suck'

I’d hate to think of buying now and having to move in 5 years.

Not unless prices double again in 5 years.

If I thought they would, I'd buy. Of course, I'd be wondering who was going to pay for a 1.8 million dollar home in Sunnyvale...

Of course, I’d be wondering who was going to pay for a 1.8 million dollar home in Sunnyvale…

The question would be, what dollar? ;)

Hopefully most of the people buying now are doing the same thing. I’d hate to think of buying now and having to move in 5 years.

No one ever really plans on selling in a short amount of time; but they wind up doing it anyway.

No one ever really plans on selling in a short amount of time; but they wind up doing it anyway.

I'm pretty sure the people getting on the ride on the way up figured they could move if they needed to, and even make money doing it. Buying now is almost guarenteeing that you can't move for at least 10 years without losing tons of money. And probably buying right now, you won't realize a 'real' break even until after the mortgage is paid off and you start living the TI lifestyle.

D.R. Horton CEO: ‘2007 is going to suck’

I'd say that's language plain enough even for Joe Six-pack to grasp.

Ceo of Toll Brothers say worst is over

D.R. Horton CEO: ‘2007 is going to suck’

This is interesting considering there's a recent piece in the WSJ analyzing the big HBs for the next year. They think exactly the opposite - HBs focusing on the lower range market like DR Horton or Centex with national (read diverse) exposure will likely do best, while luxury builders like Toll may be in for a lot of hurt. I sense yet more BS spin from Toll and maybe even a glimmer of realism from DR Horton.

The problems is MSM still reports median and that's what get's discussed at the dinner parties.

But I think the following supports what many of us have mentioned as anecdotal evidence. I continue to believe that the BA housing market is indeed in a strong downturn which is superficially masked by good job market and cheap credit.

From the perma-bull site http://sanjoseproperty.com/newsletter.html

For sellers, while sales are increasing, they're still not at the level we saw during 2003-2005. The market is also quite different. Back then, anything sold. Now, buyers are being very particular. They want homes in the best neighborhoods and in move-in condition.

Hence all the weird statistics and median madness. One day, even MSM will start printing that median is bogus.

The problems is MSM still reports median and that’s what get’s discussed at the dinner parties.

But I think the following supports what many of us have mentioned as anecdotal evidence. I continue to believe that the BA housing market is indeed in a strong downturn which is superficially masked by good job market and cheap credit.

Stuck,
As I think you well know, if you look at all of the more sophisticated RE analysis out there, uniformly they all note that a decrease in sales volume (like we've seen for over a year now) is a leading indicator before price declines inevitably follow. That's just economic common sense. When sales dry up, eventually there is downward price pressure, no matter how much kool-aid is in the tap water in the Bay Area. I would almost be willing to say further price declines, even measured by the blunt and innacurate median price, are "in the bag," to borrow a corrupted phrase...

SFBubblebuyer,

that is the bad part of Saratoga, east of 85. In essence, Saratoga wannabes who cannot afford the real Saratoga shoot for that part of town simply because of the address although it looks and feels like San Jose.

It also goes to the Moreland school district. If that house is situated a bit to the left so that it will fall into the Lynbrook school district, it would not have been so "distressed", at least you can count on a few Asian parents bidding it up.

DR Horton builds lower end homes btw, which jives well with the sub-prime mortgage market.

Stacey Dwyer, said subprime borrowers - those with weaker credit histories - account for fewer than 5 percent of its customers.

They are lying! Filty bastards.

Haven't we already determined this?

I am with StuckInBA on this one. It ain't melting down in Santa Clara... yet (even sales volume is only marginally down).
Here are aggregate numbers that NV didn't post

Community Price % Chg* $/SqFt # Sold % Chg*
All homes $669,500 2.2% $467 1,551 -1.6%
Total resale houses $730,000 4.3% $485 949 -5.4%
Total condominiums $510,000 4.5% $434 341 -1.2%
Total new homes $633,500 7.1% 261 14.5%

I see FDIC just issued cease and desist against Fremont.

http://calculatedrisk.blogspot.com/index.html

NV,

I belong to one of those you are talking about (from HK initially and came here around the time you mentioned). But the new wave of Chinese coming here from mainland China are quite different, they have never seen capitalism growing up. Also, those who came here later never saw the bad times so their frame of reference became very skewed.

Not all Chinese are shrewd and smart. Chinese culture (and Japanese too) is largely centered on herd mentality and conformity. If everyone is buying in Saratoga, you have to buy one there. If everyone is investing in real estate, you will look like an outcast if you don't.

That's why I kept my mouth shut in the last few years among my Chinese friends when they became so excited over the housing market. They tend to put personal pride into business judgement, if you question the business decision, it will be taken as a challenge to his intelligence and pride.

Many of my Chinese friends and acquaintances did participate in bidding wars in the last few years. They still do.

NV,

you are also mixing up being shrewd with being cheap. All Chinese are cheap, but only very few of us are actually shrewd.

If you see a popular Chinese restaurant with lots of Chinese patrons, I can guarantee that it is not because of the food, it's because of the price. Chinese grocery markets here usually offer the rock-bottom price taking the quality along with it.

Being shrewd means getting the best bang for the buck. Jews are much better than Chinese in that respect. Chinese are just good at parting with the least buck.

OO,

I have asked you before and ask you again. Are you sure you are talking about Chinese people ? I can say the same thing about Indians, Indian grocery markets etc ;-)

The herd mentality part although comes from being immigrant. Indians in India do not have any "extra" herd mentality than other societies. Conformity and cost consciousness are trademark of my generation. The freshly minted rich youngsters from Banglore are spendthrifts and VERY VERY different.

Even though I feel Indian buyers haven't come around to accept that RE prices can decline big time, it seems that no one is afraid to be priced out forever. Just my gut feeling. They just feel smarter to buy at a lower price than last year.

The TOL CEO must be desperate to try this ridiculous spin. Cancellations can go to zero but what's the big deal if sales also go to zero ? Cancellations are important only to identify change of sentiment from positive to negative. If sales don't pick up, who cares how cancellations are doing ? People cannot cancel orders they have never placed.

Maybe DELL can learn something from them. "Not as many people are placing orders, but that's not important. What is important is not as many people are canceling their orders. WOOOOOHOOO."

I see FDIC just issued cease and desist against Fremont.

Tomorrow I will cray half a tear for FMT bottom feeders. Hmm. Maybe not.

s/cray/cry

You mean, like these townhomes “starting in the $1,500,000″ range?

To be fair, most of their offerings are a little cheaper than that. :) And that IS Shallow Alto they're building in, there.

I'm just saying that most of what they build is cheaper than 1.5 million, not that housing isn't retarded right now.

At least you didn't offer to refi my home with an option ARM, PAR. :)

AG,

Welcome to the blog! Come breathe the free air of Truth.

Maine politicians complain of “brain drain” and can’t figure out why so many young people leave.

Once again, I think that Upton Sinclair quote applies:

"It is difficult to get a man to understand something when his job depends on not understanding it."

All politicians are afraid of saying ANYTHING negative about loanownership --regardless of what they really think-- because:

(a) It's the "Amerikan Dreamâ„¢", and you... do... love Amerika, don't you...?
(b) Nearly 70% of their constituents are loanowners vs. JBRs.
(c) The percentage of loanowners who regularly vote is also significantly higher than JBRs.
(d) They are getting an a$$load of lobbyist money and campaign contributions from NAR/NAHB/MBAA and like organizations.

State and local politicians are even MORE beholden to the REIC, because state/local budgets get a disproportionate share of their tax revenue from property owners.

It's all about knowing which side your bread is buttered on...