Bay Area Housing Crash
What? The Bay area market is crashing? Seems so. "You have just got to price it right.....great time for buyers...market slowing to its lowest level in ten years....housing market is changing......"
Picky buyer
Do you remember a time when buyers were desperate to buy. Well, that time ended about 18 months ago. Today, things are different. Now, buyers will reject a potential home deal for the smallest of reasons. Watch and learn.
Seven seconds of madness
Not quite sure what this one is about. It could represent the desperation of the current home seller.
Mortgage brokers - no thanks
Bet you can't watch more than 30 seconds of this vile infomercial. If you can get to the bit about the free cruise, you are tough, damn tough. You will watch anything.
I have several favorite quotes:
"the creative design of loan programs"
"pulling some cash out of your existing home"
"grabbing your part of the American dream through the purchase of an existing home"
"you are the cornerstone of our success"
Bridging a loan to bankruptcy
Admittedly, this guy suffers from a credibility gap. Would you go to this guy for a mortgage loan? Thought not.
The substance of what he is saying is particularly disturbing. He seems to suggest that buying a house without selling an existing one is perfectly acceptable. All you need is a bridging loan.
These days, there is a good reason why people can't sell their homes. The housing market is crashing. Taking out a bridging loan to finance a home relocation today will lead to only one place - bankruptcy.
The Donald on real estate
Take a look at this video where Donald Trump talks about how to make money in a down market. The answer is simple; knowledge, instinct, and great people.
Listen to Trump say "I made a lotta great real estate deals". Well, that maybe, but today far more people are losing money in real estate.
Can it be true......?
Here is a guy that claims that he went from $4K Lowes card to $1.5M credit debt in just in 32 months. The story is so far fetched that it is hard to believe that it is true.
Judge for yourself. Is Supercredit Man for real.
Judge for yourself. Is Supercredit Man for real.
David Lereah speaks....
David reckons that Florida is this century's California. But is that a good thing, David?
Otis takes on the realtors
Go househunting with a two year old in California. Cute kid, shame about the house.
One minute of housing market analysis
Here is a talking head telling us that now could be the time to buy.
Rat trouble
Here is a story about an ethically challenged home seller. This guy offloads a rat-infested house to an unsuspecting buyer. Why tell the buyer that the basement is rented out free of charge to disease-carrying rodents?"Friday December 1, 2006
The Guardian
When Graham Best and his wife settled in to their smart new house, they thought they had found the perfect home for themselves and their newborn daughter. Then they heard the scratching ...
It was a small house, we'd just done it up, and it was worth almost half a million pounds. The cooker was a seven-ring leviathan, weighing almost a quarter-tonne, and the bathroom looked like something out of the Hip Hotels books. It was smart, it was cool, it was perfect - the ideal spot to bring up our newborn baby and, my wife and I would chuckle smugly, the envy of our friends.
We heard the scratching on the second day after we moved in. It was a horrible noise, 20 seconds of "pfft-pfft-pfft" followed by silence ... and then more of the same. We were at the kitchen table, and we both put down our forks. "Maybe it's next door's cat," said my wife, not believing a word of it. The noise came again, and this time we were able to tune in to where it was coming from - right underneath the dishwasher. We both knew what the sound was, because we had already had a warning. The words of our electrician, uttered over the phone when the house was little more than a shell, came rushing back: "You've got a visitor," he had said, with some drama. "A rat. Sitting there right now, he is. Bold as you like." Rats get everywhere, we'd reasoned, optimistically and, after all, the house was a building site. We had thought no more about it.
Now, as our three-week-old daughter napped in her Moses basket on the floor, we regretted our nonchalance. Weren't rats, like, really dangerous? Suddenly, I remembered every word of a magazine article I had once written - an interview with an expert on the London sewage system - and recounted one especially memorable line to my near-hysterical other half: "Weil's disease is a horrible problem for us," he'd said. "It comes from rat's urine, and it's deadly."
By day four, we would hear them as soon as darkness descended. I became convinced I could smell them too - in one pocket of the kitchen there was a distinct odour. It was sweet and acrid, and uniquely vile.
Disappointment about our sparkling new house grew by the day, especially when the baby developed the sniffles - although the midwife quickly put our minds at rest. We still felt like the world's worst parents, though, and took to barricading her in her bedroom as soon as the light started to fade, and wedging a towel in the gap at the bottom of her door, just in case.
Until now, the only evidence of our uninvited guests was the noises. We remained hopeful that whatever was under the house wasn't actually getting in, content instead to scamper about under the floorboards looking for crumbs or toasting their feet on our hot-water pipes.
But then my wife found some droppings in the nook where we kept the pram. They were way too large for a mouse and looked like coffee beans. Now it was only a matter of time.
We had been there two weeks when we first made visual contact. One rat, and then another. Suddenly, there were three: ugly black beasts, each a good six inches long, scuttling across our kitchen floor. I couldn't think of anything to do but stamp on the floor, which had the instant effect of scattering the buggers, one heading behind the fridge, the other two disappearing under the dishwasher. And so began three long years of hell.
The man from Rentokil came and put down poison, but he couldn't find where they were getting in and didn't seem optimistic about his £300 fee being money well spent. With good reason: not one morsel of his deadly fare was ever snaffled. I bought some enormous rat traps from B&Q, with a truly sickening "snap" to them, and every night gingerly loaded them with peanut butter, which I had heard was better than cheese. Within a week, I had killed seven.
At first, I threw the traps away with the rodents: I would put on some work gloves, screw up my nose and drop both kill and killer into a plastic bag. But at four quid a pop, frugality eventually won the battle over squeamishness, and I found myself recycling the traps. That was probably the worst bit, meekly prising open the gadget's deadly jaws and watching a stinking, blood-spattered rat slip out. Next, I had to wash the trap clean. And then the sink. And then my hands, again, and again, Lady Macbeth-style, feeling nauseous.
Every day at work I would type things like "rat repellent trap killer" into Google. I bought - from America - a plastic bottle of powdered fox urine, apparently de rigueur for scaring the bejesus out of rodents, and a bright yellow electronic "Rat Zapper". The fox wee stank, but my foe wasn't easily fooled. Luckily, the zapper was brilliant. You threw some bait in the end (recommended: dried cat food), turned it on, and next day there was a fried plague-carrier, stiff as a board, at the bottom.
During those first few months, the handful of people we invited round were told to arrive at midday, ostensibly to fit in with the baby's sleep patterns, but actually to make sure that they were gone by the time the dreaded scratching kicked off. We withdrew socially, and became convinced all our friends must be thinking that having a child had sent us mad. We couldn't put off our parents, so we were upfront about our little problem and tried to make light of it. My wife's dad promised to loan us his air rifle, which he had once used to "polish off a 12-inch rat" in his back garden, but we talked him out of it. Even he recoiled, however, when a whiskery beast the size of a brush-head scurried past as we were eating dinner.
After four months, having dispatched at least 25 of the things and seriously contemplated selling up as many times, I took a week off work and spent every second of it pulling out fridges, fingering chimney breasts and unscrewing skirting to see how they were getting in. I never did find out, but I did manage to make the house rat-proof thanks to a job-lot of expanding foam, wooden beading, wire-wool and Polyfilla. From that day on, we never saw another rat, although if we awoke in the small hours we would sometimes hear them, gnawing at the woodwork underneath the ground-floor boards. One died down there earlier this year: you could smell it for almost three months.
"It's this town," the man from Rentokil had said, shrugging. "So many shops and restaurants, so many bins - the rats get under the houses in runs that have been here for decades."
We decided not to include that detail in the particulars when we sold last week. The buyers seemed so nice, too.
My wife and I spent many a fraught evening discussing whether or not we should tell them, but there was never any real danger that we would - who would knowingly buy a house with rats? We did contemplate sending a large cheque after we had gone, along with a letter stating: "Rip up floorboards. Pour in concrete. Relax." But we probably won't be doing that either. After all, as a guy at work pointed out to me, "Nobody told you about the rats when you bought the house, did they?" It's not much of an excuse, but it's something. Luckily, my conscience has assured me that the new buyers are early to bed, sound sleepers, and maybe a little bit hard of hearing, too. Let's just not get started on karma."
So there is nothing to worry about....
For those looking for reassurance that everything is fine with the housing market, here is an article for you. It is from the Washington post. It appears that prices in most markets have remained stable and that despite falling volumes, things are really OK. The article ends with a line that David Lereah would have difficulty mouthing "Median prices in 70 percent of the nation's metropolitan areas are still growing, and they are likely to continue to do so."
The article had a certain dated quality about it. It reminded me of Washington Post articles from 2004. However, the date at the top of the page is December 2nd, 2006.
This housing crash has only just begun. It may have started in the bubbletowns, but like a plague it will spread.
"The Median Is the Message
By Kenneth R. Harney
Saturday, December 2, 2006; Page F01
You might have seen the scary news reports just before Thanksgiving: Housing prices fell nationwide last quarter, the first such decline since 1993. Even grimmer, total sales of houses and condominiums across the country plunged by 12.7 percent, compared with the third quarter of 2005.
Omigod, you might have wondered, is this the long-predicted popping of the housing-boom bubble or the beginning of an extended period of eroding values in American home real estate? How bad could it get in the months ahead? And what might that mean for the equity I've got in the home I own?
Before considering those questions, it's important to focus precisely on the statistical data that drew all the sobering news coverage. The third-quarter median prices and sales numbers were generated from local, state and regional data collected by the National Association of Realtors. The association has been compiling these statistics since 1981 in the case of housing sales and since 1982 for prices.
Although the realty association might be viewed as having an ax to grind, its quarterly reports on median prices and sales generally are viewed as authoritative by economists and are cited by the federal government.
The quarterly pricing data, however, do not deal with housing values -- the appreciation or depreciation rates for homes in specific markets. A government agency, the Office of Federal Housing Enterprise Oversight, produces those quarterly numbers.
The NAR pricing statistics focus instead on the median price of existing homes sold during the previous quarter. The median is the midpoint, with as many homes priced above as below. The latest pricing data showed that the median price of single-family homes resold in the United States during the third quarter was 1.2 percent below the median during the third quarter of 2005. The slippage year to year came to $2,700.
How bad is that? Not a lot, but it's still important: Median-price decreases have been unusual events in recent years. They signal that something negative is underway in the marketplace. But given the unprecedented run-ups in real estate prices during the boom years, plus near-record low mortgage rates fueling those fires, who is really shocked by a 1.2 percent decline?
Something else that didn't get a lot of attention in the news reports: If you examine the 148 metropolitan markets covered by the NAR survey, you find that median prices in 102 of them increased, 45 declined and one -- high-cost San Jose -- remained flat. In other words, in 69 percent of the local markets where median prices changed year to year, the directional arrow was up, and in 30 percent, the arrow pointed down.
Some of the median price jumps were surprisingly high: Seattle (up by 14.6 percent); Salt Lake City (19.2 percent); Beaumont, Tex. (12.9 percent); and Portland, Ore. (12.3 percent). Some of the most populous metropolitan markets saw net gains, including New York (3.6 percent), Chicago (1.7 percent), Los Angeles (5.2 percent), San Antonio (6.4 percent), San Francisco (3.8 percent) and Philadelphia (2.4 percent).
Without question, there were significant declines in major metropolitan markets, as well: Sarasota, Fla. (down 9.4 percent); Miami-Fort Lauderdale (5.6 percent); Boston (4.3 percent); Providence, R.I. (5.5 percent); the D.C. area (2.2 percent); San Diego (2.1 percent); and Detroit (10.5 percent). Those decreases suggest that prices continue to outstrip buyers' economic ability -- or willingness -- to pay.
Now to the really important news that got lost in the latest statistics: The only real bust underway nationally, and in many local markets, is in sales volume, not prices or property values.
The quarterly numbers could hardly be more dramatic: Sales in Nevada plunged 38 percent; Arizona, 36 percent; Florida, 34 percent; California, 29 percent; and the District, 15 percent. All of these areas were hot spots during the housing boom years, and all of them saw significant percentages of sales to investors. They were also leaders in loan programs that allowed buyers to acquire houses they couldn't afford if they had to pay traditional monthly costs.
But if home sales are down so dramatically, why aren't median prices down more than 1.2 percent? The answer is that, absent severe reversals in national or local economies, housing prices and values move glacially in retreat. Most home sellers in stable local economies aren't forced to sell if they don't get the price they want; they can postpone the sale until market conditions improve.
That's what you're seeing right now: Sales volumes in the frothiest markets have tanked. But the statistical fact remains: Median prices in 70 percent of the nation's metropolitan areas are still growing, and they are likely to continue to do so."
The article had a certain dated quality about it. It reminded me of Washington Post articles from 2004. However, the date at the top of the page is December 2nd, 2006.
This housing crash has only just begun. It may have started in the bubbletowns, but like a plague it will spread.
"The Median Is the Message
By Kenneth R. Harney
Saturday, December 2, 2006; Page F01
You might have seen the scary news reports just before Thanksgiving: Housing prices fell nationwide last quarter, the first such decline since 1993. Even grimmer, total sales of houses and condominiums across the country plunged by 12.7 percent, compared with the third quarter of 2005.
Omigod, you might have wondered, is this the long-predicted popping of the housing-boom bubble or the beginning of an extended period of eroding values in American home real estate? How bad could it get in the months ahead? And what might that mean for the equity I've got in the home I own?
Before considering those questions, it's important to focus precisely on the statistical data that drew all the sobering news coverage. The third-quarter median prices and sales numbers were generated from local, state and regional data collected by the National Association of Realtors. The association has been compiling these statistics since 1981 in the case of housing sales and since 1982 for prices.
Although the realty association might be viewed as having an ax to grind, its quarterly reports on median prices and sales generally are viewed as authoritative by economists and are cited by the federal government.
The quarterly pricing data, however, do not deal with housing values -- the appreciation or depreciation rates for homes in specific markets. A government agency, the Office of Federal Housing Enterprise Oversight, produces those quarterly numbers.
The NAR pricing statistics focus instead on the median price of existing homes sold during the previous quarter. The median is the midpoint, with as many homes priced above as below. The latest pricing data showed that the median price of single-family homes resold in the United States during the third quarter was 1.2 percent below the median during the third quarter of 2005. The slippage year to year came to $2,700.
How bad is that? Not a lot, but it's still important: Median-price decreases have been unusual events in recent years. They signal that something negative is underway in the marketplace. But given the unprecedented run-ups in real estate prices during the boom years, plus near-record low mortgage rates fueling those fires, who is really shocked by a 1.2 percent decline?
Something else that didn't get a lot of attention in the news reports: If you examine the 148 metropolitan markets covered by the NAR survey, you find that median prices in 102 of them increased, 45 declined and one -- high-cost San Jose -- remained flat. In other words, in 69 percent of the local markets where median prices changed year to year, the directional arrow was up, and in 30 percent, the arrow pointed down.
Some of the median price jumps were surprisingly high: Seattle (up by 14.6 percent); Salt Lake City (19.2 percent); Beaumont, Tex. (12.9 percent); and Portland, Ore. (12.3 percent). Some of the most populous metropolitan markets saw net gains, including New York (3.6 percent), Chicago (1.7 percent), Los Angeles (5.2 percent), San Antonio (6.4 percent), San Francisco (3.8 percent) and Philadelphia (2.4 percent).
Without question, there were significant declines in major metropolitan markets, as well: Sarasota, Fla. (down 9.4 percent); Miami-Fort Lauderdale (5.6 percent); Boston (4.3 percent); Providence, R.I. (5.5 percent); the D.C. area (2.2 percent); San Diego (2.1 percent); and Detroit (10.5 percent). Those decreases suggest that prices continue to outstrip buyers' economic ability -- or willingness -- to pay.
Now to the really important news that got lost in the latest statistics: The only real bust underway nationally, and in many local markets, is in sales volume, not prices or property values.
The quarterly numbers could hardly be more dramatic: Sales in Nevada plunged 38 percent; Arizona, 36 percent; Florida, 34 percent; California, 29 percent; and the District, 15 percent. All of these areas were hot spots during the housing boom years, and all of them saw significant percentages of sales to investors. They were also leaders in loan programs that allowed buyers to acquire houses they couldn't afford if they had to pay traditional monthly costs.
But if home sales are down so dramatically, why aren't median prices down more than 1.2 percent? The answer is that, absent severe reversals in national or local economies, housing prices and values move glacially in retreat. Most home sellers in stable local economies aren't forced to sell if they don't get the price they want; they can postpone the sale until market conditions improve.
That's what you're seeing right now: Sales volumes in the frothiest markets have tanked. But the statistical fact remains: Median prices in 70 percent of the nation's metropolitan areas are still growing, and they are likely to continue to do so."
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