patrick.net

Is it true little Donald has been banned? Gee, I'm going to miss punting around that intellectual nitwit.

BTW, Mr. Freedom, if you care to present reasonable arguments about why housing prices will not fall, and/or why housing prices are NOT overvalued, feel free to do so.

Donald exhibited textbook troll behavior: (1) Present a shoddy, yet "controversial" argument to stir things up (I wouldn't even call his posts arguments, more like insipid taunts), (2) When faced with a rebuttal, change the subject (3) Repeat again as needed.

The problem with Donald goes beyond trolling. He's too dumb to be a good troll. That "Ivy League" edumication didn't do him no good.

Yes the psychology has shifted. There were a few mortgage/real estate crash stories on CNN recently where they enabled comments and the bears and bubblehead comments outnumbered the realtorspeak comments by 9 to 1.

This 'bubble head' meme has long legs.

A person could write a book about the rise of the bubble blogs out of no where and graph the number of bubble blogs to the phases of the RE bubble. Possibly as these blogs die off in number this will indicate when RE will become a wise investment again.

I cant imagine what next category of blog will become wildly popular out of nowhere. Probably we will see A LOT more 'I'm broke/bankrupt/foreclosure/looking for work/career change' blogs. I'm not interested in those except where if they are entertaining which is probably rare.

No kidding. I’ve had so many posts (polite, profanity-free and data-driven I might add) deleted from Realwhore/perma-bull sites, I gave up months ago.

Yeah, I know what you mean. I joined city-data dot com, created a new thread because there wasn't ONE SINGLE THREAD that showed anything negative abount the market even though it is quite obvious that the market is deteriorating right now! I got banned the day I signed up because they didn't like my handle that I was using "LongIslandBubble" and they didn't like the real data I was posting; they deleted most of the images that I put up because they PROVE that they market is crashing; but that's ok, because the thread still lives on and is being invaded by some of my readers.

I'm not gone, just going to take a short break while I monologue on my own blog. I'm in a foul mood, with all this bailout whining and pandering by our unleaders and infotainment media.

I'm just really sick of it all.

I feel like everyone is running around concocting elaborate schemes to "solve the problem", when all that's needed is so simple it's stupid: lower your fucking price.

In case any perspective sellers in Marin are reading, here's a clue: I could maybe afford to get financing to buy your $2.5mm house. I easily could get financing to buy your neighbor's $2.0mm house. But I won't. Because your house ain't worth $2.0mm. Be thankful if it's worth $1.3mm by the end of all this, which is ironically what all you choad hordlers paid in 2004. See, the people left who can afford to buy are strongly correlated with being smart enough with their money to know when to buy and how much to pay. Here's to wishing you pleasant dreams -- of the NOD that's on its way to your mailbox.

Amen Randy.

You've got a nice post over on your blog that fleshes this idea out a bit more.

Honestly though, in a Machievellian way, how can you blame the "Masters of the Universe" on Wall Street for pushing for a bailout, er, handout? If they get their heart's desire, they did a good job looking out for themselves. The group to be angry about are the enablers at the Fed and in the government. They suck. I'm sure Bendover Ben is squirming right now. He knows that a cut in interest rates during the next few meetings will erode what credibility the Fed built back up after Greenspan. But he's been painted into a corner. He appears not to have the cajones that Volcker did to essentially precipitate a recession to help the economy in the long run.

The irony, as you've pointed out, is that no degree of bailout short of de facto nationalizing housing through a MASSIVE bailout is going to be enough to stop this trainwreck. There simply aren't enough GFs left.

In theory if 70% of population are homeowners then they could get all kinds of bailouts passed if they were organized like the AARP. All they seem to have are the NAR/NAHB and the mortgage banking lobbies who want higer prices/eazy credit .

The NAR and friends might be among the most successful lobbies ever looking back at the bubble and all the housing tax perks.....other than Halliburton who have the actual current VP of the US on thier salary(deferred compensation my ass).

Now that the markets appear quasi-stable, if not frankly back on an upswing, it will be interesting to see how the Fed will be able to pull off a rate cut of ANY kind this month in the face of all this benign data. Sure, they can claim "leading indicators" show signs of a downside risk, but who the hell will really believe them? Everyone will know they will just be bailing out Wall Street.

And on the subprime bailout side of things, I will predict that once whatever cockamainie legislations gets passed eventually, a few months after that, we will start seeing MSM stories about how the bailout didn't end up helping anyone at all. This will be just in time for the presidential elections. Once the elections are over and all the empty promises have been made, bailout talk will subside and it will be back to business as usual - bubble up, bubble down. Repeat.

>> A person could write a book about the rise of the bubble blogs out of no where and graph the number of bubble blogs to the phases of the RE bubble.

That "person" sure as hell better not be David Lereah.

Temporary OMO: Fed adds $5.00 billion with 2 day RP

Carl,

He'll be writing "Why you should wait five years to buy a house" at the exact bottom of the market. No worries.

David Lereah:

2000 (June): The Rules for Growing Rich, Making Money in the New Information Economy

2005: Are You Missing the Real Estate Boom?

2006: Why the Real Estate Boom Will Not Bust

---

2007: How to Get Rich Starting Your Own Housing Bubble Blog

2008: Don't Miss Out on the Social Networking Web 2.0 Boom!

---

2011: Make Money Selling Poetry and Artwork from Your Prison Cell

(I can dream, can't I?)

Right on Randy, that's telling 'em! It's just like Rick S. said on CNBC - "there is a way to sell your house - Lower your price!"

Great midwest minds think alike!

Jeebus, I think I owe "Donald" and his butt-buddy "Freedom" an apology. Looks like CA wages are shooting up after all:

http://www.montereyherald.com/ci_6790393?nclick_check=1
"Local projects help county to avoid building job crunch"

“The bursting of the housing bubble has translated into fewer construction jobs in California, but Monterey County appears to be bucking the trend.”

“While earnings rose by 0.4 percent between 2006 and 2007 nationwide, the biggest increase in five years, in California real wages fell by 0.8 percent. Statewide, wages are 1 percent lower in 2007 than in 2003.”

I'm sure everyone knows this but David L now works at move.com (formerly homestore.com) whose ex-ceo was sentenced to 15 years in prison for dot-com era crimes. google 'stuart wolff homestore'

SFWoman Says:
Are communists necessarily fascists?

How would you expect a "freedom" lovin' f**ktard from Sukc*ckus, New Jersey to know the difference? I recall one gent on usenet who argued from the position that Hitler was a commie who lost WWII and 'founded' east germany. I would not be surprised if I found that that worthy was an uncle to The Duck who just got the old heave-ho.

SP

@Paul

The one great asset of having been reared in the Midwest: common sense. I might not be the most well cultured or socially connected bulb on the tree, and I have a bad habit of mixing my cliche metaphors, but I know how to tell if I'm standing in a pile of bullshit.

Oh, and btw fucktards, here is the latest U.S. Census estimate of CA HH median income (for 2006):

California $55,319
source: http://www.census.gov/hhes/www/income/histinc/h08.html

Up a whopping $6k from 2004, woweee!! Let's all go run out and get our 12X income shitbox McCondos while there's still time!

No HARM,

The new California is apparently the "Gold Coast" of New Jersey, er, wait, make that Alpine, New Jersey, home of many prominent rap artists, er, wait a minute, make that Saddle River, NJ. Oh wait, is that Chewbacca I see over there?

I'd buy a condotel if it came with en suite Chewbacca!

Okay, no I wouldn't.

http://finance.yahoo.com/expert/article/futureinvest/43359

Post Mortem

I think the Fed made the right moves at the right time. But the fallout from this crisis will be with us for a long time. Stocks are thought to be riskier than bonds and much riskier than mortgage bonds. Those that believed they could automatically make junk bonds safe by "backing" them with assets, be they homes or railroad cars, have been proven wrong. It turns out that the best credits are general obligation bonds based on all the firm's income and assets, not debts backed by dubious assets.

In the long run, all this is a good development for the stock market. In the last decade, more than one trillion dollars has migrated to hedge funds and untold billions to complicated debt and derivative securities. Who will buy those assets in the future? I believe quite a few investors will return to stocks and general obligation bonds - assets that they can buy and sell at any time they want.

Wall Street has rediscovered liquidity and transparency. Stocks and old-fashioned bonds have them; new-fangled collateralized debt obligations and hedge funds do not. A return to basics will be good for both the economy and the financial markets.

RandyH said:
I feel like everyone is running around concocting elaborate schemes to “solve the problem”, when all that’s needed is so simple it’s stupid: lower your fucking price.

It is starting to happen. My wife sent me a link a couple of hours ago to a property in Cupertino Foothills, which appears to be priced around $1.8M when all its comps (sqft, lot, age, etc.) are in the $2.2-$2.6M range. I have not had time to look into the details on this, but it sounds promising.

Two other anecdotes from people we know - one is a seller in the Saratoga golden triangle, whose buyer fell through because they couldn't swing the financing. Their realtor is balking at relisting at the original asking price, and is recommending that they "start" with a $50K price reduction.

Another is a potential buyer who is having trouble getting approved for a 600K loan. They own a starter home in Fremont with 400K equity and were counting on the 600K loan plus 200K savings to pitchfork them into a 1.2M home in Cupertino. They now may not get the loan, plus they may not be able to get all 400K equity from the sale of their current home... which means the ceiling for their next purchase just fell to 1M...

So far, just as we predicted here. :-)

SP

Holy Run-On Sentences, Batman!
Sorry about my previous post. I am all hopped up on an acai smoothie...
SP

SP, are you a fellow Jamba automatic-reload-card addict? I'm partial to the Bright Eyed Blueberry breakfast (though I assume all the "boosts" are powdered snake oil, so I just tell them to throw in whatever they feel like).

As someone who lives in Modesto, I can confirm that prices have come down significantly, though I can't vouch for the 33% figure. I know asking prices haven't come down 33%, but nobody gets asking price around here anymore, so it's possible the 33% figure is accurate.

Bap33 is right about the new investor-heavy developments turning into slums. I rent a new 4/2.5 in one of these slums and have a view of about 10 other homes' back yards. My back yard is the only one with grass, and about half of the homes on my street have let their front yards go brown. Lots of "for sale" signs in the development too.

I'm looking to buy in about two years, so I'm not exactly unbiased, but I can definitely see a 50% reduction in most of the Hwy99 corridor by 2009.

If we were "typical" ostrich buyers, then "our price" would have just dropped by slightly over $500,000. That's real money.

Patrick wrote:

> I was just talking to a realtor this morning, and he said
> that typical prices in his area (Modesto) are down from
> $450K last year to $300K this year. He was lamenting
> the fact that there are so few buyers and wondering how
> he can keep making a living.

He should consider a new line of work… I have been a “Former” Apartment Broker since 1993, but I should have moved on at the end of 1991. Now is the time to get a job with a bank dealing with REO property (not waiting a couple years thinking that things will turn around like I did)…

> I was wondering how the official statistics can be so wrong
> compared to numbers from someone on the front lines.

The only “official” sales that Realtors ™ report are “full price” “market” sales. Short sales, foreclosures and even distressed sales (where someone needs to sell in a hurry to take a job in a new town) do not count at “official” sales.

> Even at $300K, prices are still not low enough. By traditional
> measures, a $300K mortgage should require a $100K income.
> The typical income in Modesto is definitely under $100K.

Prices do need to drop in Modesto, but remember that the typical income in Modesto (and other parts of Mexifornia) is a lot higher than the “official” numbers since so many people are illegal and work off the books.

@Bap33,

:lol: My patience with trolls (like Sir Randall) is wearing mighty thin these days. Not a one of them has *ever* conceded being wrong on the bubble before today, much less apologized for their previous bragging, juvenile taunts, bear-baiting, etc.

Now that it's obvious they were --as DinOR pointed out-- 100% wrong, while we got it 99% right, not the faintest whisper of acknowledgement or regret. It's always the same old re-hashed B.S. and "let's change the subject" anytime someone calls them on it.

I saw a little report that said that even Prime Pacific Heights prices had dropped 4%. I'll have to see if I can dig it up and see if that was average or $ per/sq ft. I do remember that it wasn't median, but that it was larger houses that were actually still selling.

Randy H Says:
SP, are you a fellow Jamba automatic-reload-card addict? I’m partial to the Bright Eyed Blueberry breakfast

No, the smoothie was from a cafeteria at work. I haven't been to Jamba for years, literally. Got sick after I had some hot soup there around Y2K - don't know if it was caused by the soup - but I think that was the last time I went.
SP

FAB: if the "off the books: crowd here in Modesto is making more than the median household income, it doesn't show. I live in a neighborhood full of these folks. Few of them can afford to water their lawns (or perhaps they simply choose not to), and my '96 Ranger is actually one of the nicer cars on the block.

Bap33: Would love to see prices come down that far, though I'd be happy if we even returned to 2004 prices. Would be even happier if they designated the remaining farmland here in the Valley as Williamson Act land so we wouldn't have to watch developers pave over any more of the world's best agricultural land.

Does anyone one know what latitude realtors have in reporting sales prices when a house is sold? I can see an incentive for them to not report in order to keep comps high.

I know houses here in Dallas are routinely not reported per the contract. In this case it is because the county jumps on the sales price and jacks up the value and taxes the crap out of real estate. Over 3% per year. Houses are cheap here, but when you add the $1000 tax per month on top of a mortgage on a $400,000 house, it's not that great of a bargain. My total taxes almost doubled when I made the mistake of moving here two years ago.

I saw a little report that said that even Prime Pacific Heights prices had dropped 4%.

Was riding my bike along the Marina the other day, and happened to see two houses next to each other on Marina Blvd with both For Sale and For Lease signs up. I quick search on craigslist shows that one is renting @ 12K mo, while its asking price on Realtor.com is $6.1M (er, way too rich for my blood, of course). Would be interesting to know what the story behind them is, though.

I still don't get the attraction of Marina. Isn't Sea Cliff much nicer?

Marina is way too busy.

Marina is sand.

Marina is attractive because if you don't like your $4mm shitshack, just wait a few years and you'll get a chance to rebuild it from ground up.

Marina is sand.

That too.

Also, San Francisco is not Monaco. The marina does not even have pretty boats.

Marina is attractive because if you don’t like your $4mm shitshack, just wait a few years and you’ll get a chance to rebuild it from ground up.

Ah... Natural demolition permit

A great feature in commie SF. :)

I love the smell of nephon in the morning... smells like victory!

-- PS get the Super Piggy Bank

December 14, 1989
Decline Seen In Home Prices In New Jersey

http://query.nytimes.com/gst/fullpage.html?res=950DEEDF1F3EF937A25751C1A96F948260&sec=&pagewanted=print

The authors said that although their data were drawn just from New Jersey the trends and general conclusions can be applied to the entire New York metropolitan region. Cooling in Mid-1988

Using computers, the authors examined all house and apartment sales in the state from 1965 to mid-1988, a total of three million transactions. They show that although house prices here remained at or below national levels through the beginning of this decade, they soared starting in 1985.

From 1980 to mid-1988, the median sales price rose to $141,900 from $57,500, with many communities, among them Alpine and Saddle River in Bergen County and Mantoloking in Ocean County, exceeding that by hundreds of thousands of dollars.

Since then, however, prices have cooled considerably, with no increases seen. In some cases, there have been declines, a trend that could continue, depending on the economy.

Although the high prices eventually shut out many people from the housing market, the authors warned that the end of the decade of rapid appreciation could strand those who bought at the peak between 1985 and 1988. Significant social shifts could also develop, among them an increase in traditional forms of savings and a decrease in the number of moves that people make. 'A Super Piggy Bank' ''A house is not merely a home in America; it's a super piggy bank,'' said Professor Sternlieb, former director of the Rutgers Center for Urban Policy Research and now university professor at the school. ''We're starting to see some cracks around the end, but it still may be the best piggy bank around, if people just hang on.''

Mantoloking might be atypical because it is on the beach. But other towns in the 10 highest-priced communities show similar increases. In Bergen County, Alpine saw prices rise 530 percent in the decade, to $880,000, and Saddle River had a 340 percent increase, to $875,000.

The housing bubble burst after Wall Street started laying off stockbrokers in 1987. Companies started to cut back, the high prices made many corporations move employees elsewhere and the demand for housing eased. Houses that had sold in three months were sitting on the market for nine months or longer, and sellers began lowering their expectations.

Isn’t Sea Cliff much nicer?

yes, but too late for the idiots to figure it out... they most likely never been there. like they never been to Marin ... lots of idiots out there..