Record Foreclosures Sweep CA in July - Breaking News
Posted on August 7th, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research
This should be the first you hear of July foreclosure data from any source.
Each month I do a foreclosure report for the state of CA. CA makes up roughly 35% of the total unit count and 40-45% of the total dollar volume of all foreclosures in the nation. ForeclosureRadar supplies the best data available and I add in my mojo each month. Below are the previous two months reports.
- Mr Mortgage: June CA Foreclosure Report…Conditions Arguably Worsen
- Mr Mortgage - RECORD-BREAKING MAY CA FORECLOSURE REPORT
Sean O’toole, CEO of Foreclosure Radar, was interviewed for a CNN Money story released today and spilled the beans early. Since its now in the public domain I can let out the headline foreclosure data early. Make sure to click that link and read the story. It pertains to the new FHA bailout law and the $4 billion waste of money for states to rehab foreclosed houses.
July was another record month for foreclosures in the state of CA with all hell breaking lose and banks taking back roughly 26,500 homes for $12.5 billion. ’Record-breaking’ is not a good thing in the foreclosure universe. This 25% increase breaks all records ever posted and all foreclosure estimates.
If past percentages hold true, next week when the national numbers are released by other data sources, the numbers should also show a similar increase. However, not everyone gathers data the same way so I can’t guaranty what others will report. If their data do mirror this report, I do not know how the markets will react to this but many times in the past, they have not responded very well to ’surging foreclosure rates’.
In May we passed $10 billion for the first time with $10.4 billion in loans, or roughly 24k homes, going back to the banks. In June, there were $10.2 billion in loans taken back by the banks, a slight drop. This was an encouraging sign until July’s figures were tallied.
To clarify, when I say ‘loans taken back by banks’, these are actual foreclosures. When a home goes to the auction block the bank puts up the opening bid. If no 3rd party bidder comes in, the bank buys it back. All year long in CA at least, banks have been buying back roughly 97-98% of all homes that go on the auction block. That is an astounding figure in and of itself!
This $12.5 billion in foreclosures were from Notice-of-Defaults (NOD) from the February time frame. It takes roughly 140 days in CA to go from NOD to foreclosure auction currently due to the back log. In Feb we had a drop in NOD’s to about 37k due to Feb being a short month. But from March though June we saw NOD’s shoot back up to record levels of about 43k per month (see chart below). This means that the number and dollar amount of foreclosures from Sept through Oct at least should be even greater than July by 10-20% depending on fluctuating cure rates.
My official report will be out in a few days when I will have the final Notice-of-Default, Notice-of-Trustee sale and foreclosure sale figures. I will also release my monthly YouTube video and forward analysis at that time. Until then. Best, Mr Mortgage
CA Housing Market Chart through June 2008. Please note this chart does NOT have July data, as it is not all available as of yet.
Other Related Mr Mortgage Stories
- Moody’s & Fitch Join S&P in Massive Alt-A RMBS Downgrade Avalanche
- Mr Mortgage on Mortgage Modifications: You May Qualify!
- Mr Mortgage: Mortgage Modifications Part 2 - Being Forward Thinking
- Dr Martin Weiss Confirms Views on WaMu and Wachovia
- S&P Does Hatchet Job on Thousands of Prime, Alt-A and Subprime RMBS
- WaMu: Liquidity Options Running Low
- Mortgage Implosion Round 2: The ‘Pay Option ARM Imp
- Alert: Downey Savings Abruptly Stops Doing Pay Option ARMs
August 7th, 2008 6:36 pm
Mr.M,
So the surge is happening faster than expected? Could we see the bottom of this tsunami sooner than 2011?
August 7th, 2008 6:40 pm
“..In CA at least, banks have been buying back roughly 97-98% of all homes that go on the auction block.”
Considering the banks are not in the business of owning homes, this could mean massive deflation, no?
All I know is Wall Street likes to deal with pain quickly.
I’m hoping prices tank faster, so we can get to the bottom sooner.
August 7th, 2008 7:35 pm
“Could we see the bottom of this tsunami sooner than 2011?”
Steeper means deeper not shorter.
August 7th, 2008 7:37 pm
I dont know when the pain will come but these foreclosures are still primarily subprime. The Alt-A is just starting to default and foreclosures lead notice of defaults by 4-5 months. So we are in inning 4 of the subprime implosion, inning 1 of the Alt-A implosion and warn up for the Prime implosion.
August 7th, 2008 7:45 pm
They’re happening faster than expected because of resets happening much sooner than agreed to. This is because roughly 80% of people with Pay Option Arms are paying the “neg am” payment (going backwards) every month. Also, Interest Only loans have thresholds as well. Couple this with incedible price deflations and it’s literally forcing lenders to reset rates WAY sooner than expected and throwing people into default/foreclosure at record breaking pace never before seen. Voila!! Bullet train going downhill, with wind at its back, and greased tracks. That’s how fast this is unfolding.
The Tsunami is upon us people and if you think you’re on ground so high that the wave isn’t going to engulf you too, you’re delusional. These happenings are going to devastate every upper-middle, middle, and lower-class group into oblivion. Everyone and their pug is putting gum in the holes to stop the water, but there is no stopping it at this point.
Thanks Bush, Cheney, Paulson, Bernanke, Greenspan, every Wall Street investment firm, Fannie, Freddie, every chartered bank, and sooo many others it makes me want to vomit!!! We appreciate your TAKING EVERY LAST DOLLAR AND SEMBLENCE OF HOPE WE HAD LEFT!!!
August 7th, 2008 7:56 pm
I think I’ll kill myself right about now.
August 7th, 2008 7:57 pm
I think Real Estate Agents who tell people that “NOW” is a great time to buy should have a cactus shoved in their anus.
August 7th, 2008 8:03 pm
JRB,
On a positive note, if you are not “banking” on your equity in your house, I don’t think it will be that bad. Homes are not commodities, nor should they be traded like one. True equity in real estate is when you own it outright, and have an actual asset on your hand making you money with a cash flow.
The sheeple are losing their hides on this becuase they were gambling on equity. It’s not a real profit until you cash-out.I see this tsunami as a giant wave, that will come once in a lifetime. As a surfer, you better catch it, and capitalize on this historic event. Timing is everything.
August 7th, 2008 8:05 pm
The swell is just coming in. Surfs up!
August 7th, 2008 8:06 pm
James - Tell Troy I said hi.
August 7th, 2008 8:49 pm
Whose ADMIN ?
August 7th, 2008 8:51 pm
Mr Mortgage - Tell Troy H. I said hi.
August 7th, 2008 8:54 pm
Mr. M,
Is there a way to post images?
August 7th, 2008 8:56 pm
have no clue - send me what you want to post and maybe i can get it posted. mrmortgagetruth@gmail.com
August 7th, 2008 9:00 pm
Hey Bro…not sure who that is but when I figure it out I’ll do so. I’m still looking for work to plug the holes in between loans and Money Merge Account sales with no luck.
Got like 5 referrals from my networking group this week but three of them are so underwater that even FHA can’t help them and the other two going nowhere fast. People are so naive as to what is going on. I had a carpet cleaner basically tell me I needed to keep a positive mental attitude. Hard to do in this environment. Positive mental attitude…I bet I can pay some bills with that!!!
Keep spreading the truth. I just finished Reading Empire of Debt. Good read but scares the hell out me. I’m waiting for I.O.U.S.A to be in print. When is somebody going to come up with a solution ?
August 7th, 2008 9:22 pm
James,
Isn’t denial a powerful emotion?
August 7th, 2008 9:47 pm
Definition
Denial is the refusal to acknowledge the existence or severity of unpleasant external realities or internal thoughts and feelings.
Denial can also be exhibited on a large scale— among groups, cultures, or even nations. Lucy Bregman gives an example of national denial of imminent mortality in the 1950s: school children participated in drills in which they hid under desks in preparation for atomic attacks. Another example of large-scale denial is the recent assertion by some that the World War II Holocaust never occurred.
Types of Denial
Denial of fact: This form of denial is where someone avoids a fact by lying. This lying can take the form of an outright falsehood (commission), leaving out certain details in order to tailor a story (omission), or by falsely agreeing to something (assent, also referred to as “yesing” behavior). Someone who is in denial of fact is typically using lies in order to avoid facts that they think may be potentially painful to themselves or others.
Denial of responsibility: This form of denial involves avoiding personal responsibility by blaming, minimizing or justifying. Blaming is a direct statement shifting culpability and may overlap with denial of fact. Minimizing is an attempt to make the effects or results of an action appear to be less harmful than they may actually be. Justifying is when someone takes a choice and attempts to make that choice look okay due to their perception of what is “right” in a situation. Someone using denial of responsibility is usually attempting to avoid potential harm or pain by shifting attention away from themselves.
Denial of impact: Denial of impact involves a person avoiding thinking about or understanding the harms their behavior have caused to themselves or others. By doing this, that person is able to avoid feeling a sense of guilt and it can prevent that person from developing remorse or empathy for others. Denial of impact reduces or eliminates a sense of pain or harm from poor decisions.
Denial of awareness: This type of denial is best discussed by looking at the concept of state dependent learning[2]. People using this type of denial will avoid pain and harm by stating they were in a different state of awareness (such as alcohol or drug intoxication or on occasion mental health related). This type of denial often overlaps with denial of responsibility.
Denial of cycle: Many who use this type of denial will say things such as, “it just happened.” Denial of cycle is where a person avoids looking at their decisions leading up to an event or does not consider their pattern of decision making and how harmful behavior is repeated. The pain and harm being avoided by this type of denial is more of the effort needed to change the focus from a singular event to looking at preceding events. It can also serve as a way to blame or justify behavior (see above).
Denial of denial: This can be a difficult concept for many people to identify in themselves, but is a major barrier to changing hurtful behaviors. Denial of denial involves thoughts, actions and behaviors which bolster confidence that nothing needs to be changed in one’s personal behavior. This form of denial typically overlaps with all of the other forms of denial, but involves more self-delusion.
All I can say is wow. Pass me another glass of what you are drinking and lets toast.
August 7th, 2008 10:12 pm
Captain Morgan has a much better grip on reality than Chas. Hugh Smith. If anyone feels despondent after Smith, you’ll like s**t after hearing the Captain speaking.
August 7th, 2008 11:34 pm
OH
Hell
Yeah.
Let it ride.
August 7th, 2008 11:40 pm
The important thing to remember is that there will be no miraculous recovery! There will be no voodoo financing to drive up prices for decades! Go to yahoo finance and try their calculator “how much house can I afford” put in realistic numbers. most people (a cop and nurse) will be stretching to buy a $250,000.00 home.It’s going back to 1997 prices and then prices will track inflation. Anybody who purchased a home after 2000 will be underwater for about 10 years. Do the math; nobody, no government can stop math. If we try to print money gas will be $10.00 and interest rates will be 18%. Discuss?
August 7th, 2008 11:41 pm
YES, but WHAT IS HAPPENING TO THESE REO’s???
Are they eventually selling, or are banks just sitting with 10’s (100’s??) of thousands of homes on their books?
What is their motivation for holding all these homes? Is this so that they don’t have to cause further declines in market values? I’m thinking this will allow them to unload remaining and upcoming distressed loans to FHA at a higher value that they could otherwise. Am I totally off here?
August 8th, 2008 12:26 am
Mr. Mortgage why no more videos?
That is your best Platform.
Whasssupppp?
The passion in your videos can never be captured in the written word.
Play on Player.
August 8th, 2008 12:42 am
the bigger problems is probably just starting. The so called “prime loans” are next,IMHO. The bigger they are the harder they fall. Only 10 to 15% of the bay area can afford a home (including the one they are living in).
August 8th, 2008 1:21 am
Mark in SF…..You are on the right track. The banks are holding them for the same reason they want to slow the foreclosures down because the market is flooded with NON-REO inventory, couple that with dumping a ton of REO’s into the market at the same time…..it would be like China or Iran dumping all of their Treasury notes on the market. Values would plummet overnight. This is beginning to happen as banks are having to raise capital and they cannot raise capital with this albatros hanging around their necks and have to dump them like Citi at 20 cents on the dollar. So, the folks living in those s/d’s or markets that pay their bills each month will pay the penalty for those that did not. VALUE gets hammered with each wave of foreclosures. Banks make out cause Aunt Fannie and Uncle Ben are there to “lend” them a hand. Sorry…I could not resisit that one.
August 8th, 2008 3:17 am
“Go to yahoo finance and try their calculator “how much house can I afford” put in realistic numbers.”
There was some sort of show on CNBC yesterday evening where they had the guy who won the NY lottery on asking for advice on how to spend his money wisely. He was a doorman prior to winning the lottery and wants to make his money last. His winnings were $5M, paid out $65K chunks every quarter of which his post-tax income is $32K. Basically, he’s earning $10K/month net. The host of the show told him how much house he could afford - $500K. His face went lifeless. It is a sign of the times when a lottery winner can’t afford a condo in NYC. Cheers.
August 8th, 2008 5:55 am
The Tsunami is upon us people and if you think you’re on ground so high that the wave isn’t going to engulf you too, you’re delusional.
Everyone will be ‘engulfed’ by falling house prices, that’s for sure. Sooner or later banks will drastically cut prices to move REO inventory — this is already happening in some areas, and is one reason REO sales are such a big part of overall sales activity. This will be a mark-to-market for every nearby home, ‘high ground’ or not. And we all know low prices lead to more foreclosures. Which means the banks will generate more REO inventory for themselves — they’ll be cutting their own throats. A vicious cycle that is inescapable.
Expect more congressional action.
August 8th, 2008 9:06 am
Sounds like it is getting close to a good time to buy in California. Know that median down to 275K or so then the average hard working, finacilly responsible people can step in and start buying. The faster this happens the better for all. Draggin it out is helping no one.
August 8th, 2008 10:37 am
‘Close’ is relative. How about ‘close’ in about 3 years from now?! - when we’re in the middle of the Grand Depression and you can pick up the house of your dreams for a song (and some ‘Loose Change’). What’s the song? “Hava Nagila” (”Let us rejoice”). If you’re not familiar with ‘Loose Change’, Google it and watch the video!
August 8th, 2008 10:40 am
I don’t understand. Seems very contained to those areas that overbuilt. I live in laguna beach and there are foreclosures and banked owned properties here and there. Everyday I see more “for rent” signs on lawns (3 on my block alone - and they are taking a while to rent maybe due to poor credit). However, prices are still at the same level they have been for years- maybe a 3% decline at best. When if at all does this mess start to correct over valued homes in “desirable” places? (were they not as desirable 7 years ago when that house went for 600k instead of 1.1 today?)
August 8th, 2008 10:47 am
Fannie came out with awful numbers this morning and the skf’s are down… sigh.. wtf?
August 8th, 2008 10:48 am
One more thing, we’re fresh outa 1st-time buyers in CA who can afford a $275K house on ‘traditional’ terms. So the folks with a house can’t find buyers to allow them to ‘trade up’. Darn it! Ever hear of a place between a rock and someplace harder? As they say in RE - location, location, location!
August 8th, 2008 11:39 am
Amen to that EO!
August 8th, 2008 11:55 am
Karl D has posted an excellent analysis of Fannie/Freddie, etc. today:
http://tinyurl.com/ytn8ru
Captain Morgan and Mish - even Chas. Hugh Smith - and Mogambo and Mike Whitney know what’s going on and certainly Peter Schiff knows what’s coming down the pike BUT they are ALL missing (intentionally or otherwise) the REALLY IMPORTANT STORY! That is the WHO DID IT part of the story.
In order to understand where we are all going and WHY (in earthling terms, at least), you MUST connect ALL the important dots! Andrew C. Hitchcock has put together a self-starter kit of important dots in his book: “The Synagogue of Satan”. This is MUST reading for anyone who wants to know where the Yellow Brick Road is leading (humanity) and WHO built it. You can get a copy at Amazon for about $16 (including shipping). No, I don’t get any royalties! On the other hand, you can just study my website and Blog (including links) and you’ll get a LOT MORE dots - for FREE!
August 8th, 2008 11:58 am
PS In living color and with a soundtrack, even! (for those who want to be entertained)
August 8th, 2008 12:02 pm
PPS What kinda story is it? How about ‘Murder Mystery’?!
August 8th, 2008 12:12 pm
PPPS Did someone ask: “Is it Fiction or Non-Fiction”? You might also ask: “Is the $9.5Trillion Federal Deficit Fiction or Non-Fiction”, OR “Is the Mortgage Mess Fiction or Non-Fiction”, etc. Ask the foreclosed-on ex-homeowners or all the people who lost their jobs in the RE industry. Then you can put together an ‘interesting’ Documentary - but who will publish it??? Know who controls the publishing business?
August 8th, 2008 12:22 pm
EO,
I think we all know that Fannie and Freddie are toast. My question is, what is next after they are split up and sold off?
I still don’t know WTF those two gov’t institutions (or wait, kinda private companies) did? I never got any assistance from them. But I know my tax dollars have been going to them. And more will in the future.
I also don’t know why everyone is always up in arms about Big Gov bailing out everyone. Banks and socialist institutions have always been protected by the Gov’t. No matter what kind of crap they get themselves into.
Nothing new here folks. I learned this in high school American Gov’t class.
August 8th, 2008 12:24 pm
..not in a public school. ; )
August 8th, 2008 12:51 pm
OD
Read Karl D’s article - he explains what the FFs have been ‘up to’. You’re right - the taxpayer did not get much of anything in return! Gov’t is interested in keeping the Game going until TSHTF - the longer they can wait, the more S**t will accumulate to be let loose on the unsuspecting public. Get the Hitchcock book and you’ll understand what the Game is all about! (and who the Players are).
August 8th, 2008 12:53 pm
Or, to sound like a broken record, you can study my website and Blog - and get a MUCH BIGGER return on your investment (of Time).
August 8th, 2008 1:05 pm
Did a Black Swan just swim into view (Russia:Georgia)?
August 8th, 2008 1:09 pm
The Bush Gov’t will be looking for ANY excuse to get the attention of Americans off the dire straits into which we are now sailing! (Straits of Hormuz?, Straits of the “Zionist Depression”. Any old ‘BIG EVENT’ (Ron Paul) will do to provide the excuse)
August 8th, 2008 1:49 pm
From the Fannie Mae conference call: Alt-A foreclosures have doubled in southern California. (courtesy of Calculated Risk)
August 8th, 2008 1:50 pm
Does anyone trust Zillow for their Zestimates of housing prices? Beware because they are not taking foreclosure sales into account. I blogged about this:
http://lcmarket.blogspot.com/2008/08/zillow-and-their-zestimates.html
August 8th, 2008 2:06 pm
“When if at all does this mess start to correct over valued homes in “desirable” places?”
Prices have indeed stayed stickier to date in the nicer areas… I think people have more means to ride out equity erosion and rate recasts. And you are always going to have a few people delusional enough to keep paying the WTF prices, so long as they can get financing. But I’m sensing people are starting to realize that prices are not going to recover before the end of the 2008 selling season, banks are starting to lock down more load options, and even the comparitively rare REOs are starting to bring down comps. As others have said, we are still in the first inning of the Alt-A and Prime problems.
August 8th, 2008 3:51 pm
“The market can remain irrational longer than you can remain solvent”. This quote sure rings a bell today, a 300 point rise on the back of huge losses at Fannie and RBS. The safehavens of Gold and silver continue to fall. The P/E ratio of the DOW is now NIL, check it out at barron’s market lab. As Mr M points out, the problems in housing continue to get worse all the time. And the markets rise???
August 8th, 2008 4:47 pm
When deflation comes into play (housing market is only foreshadowing the future for the rest)..people tend to buy.
Besides, wall street these days is nothing more than and online video game for rich speculators. One word: Volatile.
W.Street makes as much sense as gambling in Vegas.
August 8th, 2008 4:51 pm
[...] Record Foreclosures Sweep CA in July - Breaking News Mr. Mortgage (7 Aug 2008) [...]
August 8th, 2008 4:57 pm
Thank you for making us aware of the new capital gains exclusion rules.
I purchased my home June 27, 2007. I plan to sell it next summer. I have lived in the home the entire time I have owned it (atcually longer since I rented this home before I purchased it - I have lived in it since October 2006) and I will continue to live in it until I sell it.
Until now, I thought I’d have to wait until June 28, 2009 (two years after purchasing it) to sell my home to avoid the capital gains tax. Under the new Capital Gains Exclusion rule it appears I can sell my home sooner without a capital gains tax since I have lived in it the entire time I have owned it. It appears I do not have to wait for two years. Or is there a two-year minimum? I have called the IRS and they do not know a thing about the the new Capital Gains Exclusion rule.
Any idea how I can confirm this - if I can do it without a capital gains tax, I’d like to sell my house sooner than June 28, 2009.
August 8th, 2008 5:16 pm
Seems like the global central banks are propping up the dollar. From http://goldmoney.com/en/commentary.php
“On July 16, 2008 (the closest date of the weekly reports to the July 15th low in the Dollar Index), the Federal Reserve reported holding $2,349 billion of US government paper in custody for central banks. In its report released today, this amount had grown over the past three weeks to $2,401 billion, a 38.4% annual rate of growth. To put this phenomenally high growth rate into perspective, for the twelve months ending this past July 16th, assets in the Federal Reserve’s custody account grew by 17.3%, which is less than one-half the growth rate experienced over the past three weeks.”
So over a 3 week period central banks have propped up the dollar by pouring in 52 billion dollars. This explains the fall in the gold and silver prices (plus oil) and rise in equities. Market manipulation at it’s best - discreet and secretive.
August 8th, 2008 5:48 pm
Most important quote from that article: “With this intervention, central banks have bought some time. But alas, they have not fixed the problem.”
Clear!! …beep…beep…beep.
whew!
August 8th, 2008 6:51 pm
Kis, there are a few things going on in desirable areas and places of wealth (i.e. SF and Bos for example). These areas and the people that reside in them often have a much higher fico score and thus obtain much better rates and terms. It is these very areas and the people that live in them that have the majority of 5/25 type loans coming due for resets over the next few years. They make money, but spend it equally as fast and rely on credit for the most part like everyone else does. Their credit does not get shut off as fast either, so it has still been there for them if they have needed it to keep the shell game alive. They are hoping this thing corrects before they get exposed. Well it is not going to and these areas and many of the people that reside in them are going to be exposed and soon. That is the 3′rd & 4′th inning at play…
We could and should be looking at 3 million foreclosures in 2008 in my opinion. Many of these reset schedules are also being blown up and reseting much earlier due to the way the terms are written. We will have a massive wave of resets for the rest of this year. We still have 2 quarters to go and they are not only typically the worst for housing sales, but coming on the heels of major job losses to this very group of white collar workers and rising interest rates that will basically take any chance of recovery out of the mix in what they will end up doing. In other words… with each passing days their options become more and more limited until eventually they will run out!
All of this on top of credit tightening beyond belief now and specifically at the jumbo level of loans. Again this very same group will be affected the most from this. Subprime is no longer even a big deal as they have pretty much ended their run of defaults in terms of record numbers. Plus they are much smaller in size and scope than what we are about to witness. In other words irrelevent at this point in not only our recovery, but our ability to move forward as a country past this. Heck, it was obvious to me from the start that the concern in Washington was very little up until Fannie and Freddie were exposed. They stood by and watched roughly 1.5 million people lose their homes before they even started to truly react. When they finally did it was to bail out the GSEs and up the conforming loan limits. Kind of makes you wonder what their true motive was doesn’t it.
In their lack of reaction however and their willingness to allow the failures at the low income (I mean subprime) areas they underestimated the lenders ability to handle it. They then had to open up the discount windows and eventually had to open them up to almost anyone that needed a capital infusion to stay a float. The leveredge these lenders were dealing with did not allow for even the subprime implosion to take place and they were ill equipped to handle it. Now on top of that they have had to extend the discount window through the balance of the year. They are doing what these very same prime and alt-a borrowers are doing and that is trying with every possible idea to stave off the inevitable. It simply will not and has never worked. YOu must eventually pay for the errors in your ways and the bill is coming due, and it is going to be mammoth!
All this intereference by the Fed and the Governemnt is doing is extending the day of reckoning and the price tag to our childrens, childrens, children. They will be the true sufferers of all of these reckless policies in the end. We won’t fail as a country, but will set ourselves back 50 years after all of this is said and done, and all on the backs of our countries future. Shame on us as a country for doing so if you don’t mind me saying so…
August 8th, 2008 7:15 pm
I am watching Nadar/Gonzales on C-Span and all I can say is WOW!!!
August 9th, 2008 12:35 am
do we see any good news from all this ? I always hear- people should dump their homes and rent- the ones who can pay are screwed because, those that can’t, dumped and now our houses are worth less. You can’t re-fi. If you can pay- you can’t modify. what the heck? this is soooo crazy- I can blame, but that doesn’t change anything. The one in Laguna is right they probably held value but not for long- if they don’t rent them they’ll forclose. There are other areas that held value in Cali but, I am sure not for long. So- anything good coming or just doom and gloom?
August 9th, 2008 11:06 am
i’m looking to buy, today I will be looking at some homes. Should i just wait a couple months for the price to drop further or should i make an offer at lets say 10% less than than current market value?
August 9th, 2008 11:31 am
bought at the wrong time:
It depends on what your idea of good is, hehe. It’s all about perspectives. Believe it or not there are states that have homes holding on the value with moderate to good demand.
The big bad bailout plan is going to help some people, but even they will have to convince lenders to work with 90% of current value. How many of them do you think will jump at that chance?
I think the sooner prices start to normalize (pre-2002-03 levels) the sooner we can see the extent of how bad it is, and in relation, see just how badly underwater we are. Gov’t is doing all they can to look good for the elections and that’s keeping a pretty thick paper bag over all our heads.
As for me, I do see some people getting creative in this market, and I guess I’ll trust that same capitalist free market that got us into this mess will figure some way to turn poo into gold.
August 9th, 2008 11:37 am
This is interesting tho:
http://tinyurl.com/5ewpvr
A condo developer in long beach is jumping the gun and auctioning units at roughly half their previous listing price. I’m curious to see how it will do. It’s pro-active tho, and its either they got the reality chills early or just decided to sacrifice a few units for the publicity.
August 9th, 2008 12:03 pm
YES!
As I said, the people who can see any positive in all of this are the ones who stayed financially conservative. They believe in only buying what you can afford.
When prices dump, these people will come in and start buying again. Sure most of them can afford to buy now, but when you are smart, you buy at the absolute bottom.
Most of these real estate investors also don’t bank on the perceived equity in their property. They are not flippers. They invest in the long run. They create a CASH FLOW. It’s a lot like the game Monopoly.
You don’t own shit, until you own it outright. This may be hard fact for people to swallow, but it’s the truth.
Most people took the blue pill and ignorantly believed their wealth was measured on how much equity one had.
The question is, do you want he blue pill or the Red? (Matrix for all you you missed the analogy)
August 9th, 2008 1:46 pm
This will go on for another 2-3 years. Looking at the charts I feel sorry for the fools (is there any doubt they are anything else?) who purchased late in the cycle. They have had the privilege to be home “owners” for a good 6 months and have found the return on their “investment” is -20% (or ~100K for the 480K median price)
Anyone willing to guess as to how many families (let alone investors) can take a 100K financial hit and survive unscathed?
August 9th, 2008 2:07 pm
Even if you are prime and make more than enough to pay for your home, what incentive do you have to continue paying off your 800K loan (with interest) when the asset value has fallen by over 50% due to market dynamics or worse, neighbourhood foreclosures.
Even the educated scientists and google geeks will start to question their sanity as they watch their once “elite” neighbourhoods of million dollar tract homes or even million dollar townhomes in some sillycon valley locations start rotting away due to foreclosures or getting rented out to middle/low income families after some savvy investors start buying up these properties and putting them on the rental block.
August 9th, 2008 4:27 pm
Chas. Hugh Smith is right - RE will be a Capital Trap for the foreseeable future. It doesn’t matter whether your equity is -50% or +150%. The Cash Flow generated from (Commercial) RE will turn negative once vacancy rates rise. The result will be empty office space - very similar to empty (foreclosed) houses! - and investors holding an empty bag until they go ‘belly-up’. Have a look around at all the Commercial RE for lease or sale. With business bankruptcies steadily climbing (along with unemployment), RE only has one place to go - into the sewer!
August 9th, 2008 4:31 pm
PS Remember the first 3 principles of RE investing: Location, Location and Location. The sewer is a Location. Try not to invest there.
Caveat Investor! Ooops - too late!
August 9th, 2008 7:54 pm
is anyone else following the russian georgian conflict? this link is actually quite scary, A massive US armada is heading for Iran, possibly to blockade benzene imports, hence shutting down the iranian economy. http://europebusines.blogspot.com/2008/08/massive-us-naval-armada-heads-for-iran.html
“The US Naval forces being assembled include the following:
Carrier Strike Group Nine
USS Abraham Lincoln (CVN72) nuclear powered supercarrier
with its Carrier Air Wing Two
Destroyer Squadron Nine:
USS Mobile Bay (CG53) guided missile cruiser
USS Russell (DDG59) guided missile destroyer
USS Momsen (DDG92) guided missile destroyer
USS Shoup (DDG86) guided missile destroyer
USS Ford (FFG54) guided missile frigate
USS Ingraham (FFG61) guided missile frigate
USS Rodney M. Davis (FFG60) guided missile frigate
USS Curts (FFG38) guided missile frigate
Plus one or more nuclear hunter-killer submarines
Peleliu Expeditionary Strike Group
USS Peleliu (LHA-5) a Tarawa-class amphibious assault carrier
USS Pearl Harbor (LSD52) assult ship
USS Dubuque (LPD8) assult ship/landing dock
USS Cape St. George (CG71) guided missile cruiser
USS Halsey (DDG97) guided missile destroyer
USS Benfold (DDG65) guided missile destroyer
Carrier Strike Group Two
USS Theodore Roosevelt (DVN71) nuclear powered supercarrier
with its Carrier Air Wing Eight
Destroyer Squadron 22
USS Monterey (CG61) guided missile cruiser
USS Mason (DDG87) guided missile destroyer
USS Nitze (DDG94) guided missile destroyer
USS Sullivans (DDG68) guided missile destroyer
USS Springfield (SSN761) nuclear powered hunter-killer submarine
IWO ESG ~ Iwo Jima Expeditionary Strike Group
USS Iwo Jima (LHD7) amphibious assault carrier
with its Amphibious Squadron Four
and with its 26th Marine Expeditionary Unit
USS San Antonio (LPD17) assault ship
USS Velia Gulf (CG72) guided missile cruiser
USS Ramage (DDG61) guided missile destroyer
USS Carter Hall (LSD50) assault ship
USS Roosevelt (DDG80) guided missile destroyer
USS Hartfore (SSN768) nuclear powered hunter-killer submarine
Carrier Strike Group Seven
USS Ronald Reagan (CVN76) nuclear powered supercarrier
with its Carrier Air Wing 14
Destroyer Squadron 7
USS Chancellorsville (CG62) guided missile cruiser
USS Howard (DDG83) guided missile destroyer
USS Gridley (DDG101) guided missile destroyer
USS Decatur (DDG73) guided missile destroyer
USS Thach (FFG43) guided missile frigate
USNS Rainier (T-AOE-7) fast combat support ship ”
this crisis could escalate sharply
August 9th, 2008 8:22 pm
VOLTAIRE (Francois Marie Arouet) 18th century French philosopher, wrote: “They are, all of them, born with raging fanaticism in their hearts…. I would not be in the least bit surprised if these people would not some day become deadly to the human race.” (Lettres de Memmius a Ciceron, 1771)
Anyone care to guess who ‘these people’ are? The word ‘people’ is stretching things a bit.
‘Some day’ is just around the bend.
Would you be raging with fanaticism if you knew you would be melted? (Ezekiel 22:20)
August 9th, 2008 9:04 pm
http://www.kuwaittimes.net/read_news.php?newsid=MTAxNzA0MDM1Ng==
“KUWAIT: The government is finalizing its emergency plan this week in order to ensure that the country is protected from foreign dangers in case the regional situation escalates and a war breaks out between Iran and the USA.”
this is well worth reading as well, http://www.guardian.co.uk/world/2008/aug/09/russia.georgia1 , thousands of russian fighters pouring into south ossetia.
August 10th, 2008 3:03 am
“I don’t understand. Seems very contained to those areas that overbuilt. I live in laguna beach and there are foreclosures and banked owned properties here and there. Everyday I see more “for rent” signs on lawns (3 on my block alone - and they are taking a while to rent maybe due to poor credit). However, prices are still at the same level they have been for years- maybe a 3% decline at best. When if at all does this mess start to correct over valued homes in “desirable” places? (were they not as desirable 7 years ago when that house went for 600k instead of 1.1 today?)”
I live in Fairfield County Connecticut right outside of NYC. Tons of Wall St and old money here. I agree with the comment above that prices here have fallen but only slightly. And this only took place over the past few months. When I see prices in these wealthy areas stable I sense things will get much worse. These needs to be a total purge and then we will have to wait 10 years for prices to go up again.
August 10th, 2008 8:30 am
Hi Dick,
The ooze is creeping in. It is going from the more urban subprime epicenters that experienced the largest building growth and/or the lowest priced areas still in commutting distance to a major metropolitan population and employment hub to suburbia and finally to urbia. This is why the overall ‘Mortgage Implosion’ is unfolding in stages ie: subprime, Pay Option, overall Alt-A, lower grade Conventional Prime, Jumbo Prime and finally Prime mortgage Implosions.
We are in early innings with the weakest falling first.
August 11th, 2008 1:06 am
Mr. Mortgage: Long time no see. My Chinese dollars was dropping like a stone. Same as my GOLD. Sigh… I hope you and others are doing well, at least, much better than me.
Now, I am tired of living in an apartment, is it time to buy a foreclosure/short-sale house?
August 11th, 2008 1:07 am
Viv, US can not afford to take a 3-sided war, it is just as a dog’s biting.
August 11th, 2008 9:58 am
“this crisis could escalate sharply”
I think this is exactly what the US gov’t wants. This crisis will not only help the dollar in the long run, this conflict would be the only thing preventing the dollar from tanking, holding off inflation, and keeping the USA’s strongest industry alive…(military/weapon’s industry).
August 11th, 2008 3:15 pm
Mike Whitney scores another bullseye on the Georgia:Russia:Washington:Israel target:
http://tinyurl.com/5qh39a
Watch $50Billion of Freddie/Fannie bonds get dumped on the market.
August 11th, 2008 3:19 pm
If the link doesn’t work, go to GlobalResearch.ca and click on News:Bush War for the Whitney article.
August 11th, 2008 3:20 pm
Or try this one:
http://www.globalresearch.ca/index.php?context=va&aid=9791
August 11th, 2008 7:18 pm
I hope you are right EO. My gold shares have been getting pummeled lately. ; )
August 11th, 2008 8:19 pm
Not looking so good for Downey. I’m surprised Mr. M didn’t report it before anyone else.
http://www.marketwatch.com/news/story/downey-says-regulators-limit-some/story.aspx?guid=%7BE42720CE%2DB4FB%2D48E5%2D8959%2D9CE189BFFC2C%7D
August 11th, 2008 8:24 pm
od, your gold will continue to fall unfortunately… it is no longer pegged to anything so it acts like a typical commodity (see oil). Once demand wanes as it has it goes back to whence it came…
The recent goal, or should I say attempt, is to prop up the US dollar. Now on the surface it makes sense, but we all know where that leads us. Of what intrinsic value does a stronger dollar hold for the EU? Japan? UK? None I can personally think off. China perhaps…
Well a recent 10 billion EU infusion of cash was bestowed upon us. Why? We are in a hugely deflationary period that far outstrips any inflation we have lurking about, and now a false prop up of our currency to do what? Stem the tide? Hold of the inevitable? Stave of a more pronounced collapse?
There is nothing anyone or any country can do at this point to stop the bloodshed in diminished wealth for our country going on right now. NOTHING! Well short of them actually giving us money (which this 10 B was… a gift) for free. We must take the estimated by some amount of TWO TRILLION dollars in write downs and watch 100’s of lenders collapse in order to be done with this and start a new. That or watch many others go down with us while trying to foolishly save us… no options are good, but neither was our attitude over the last 7 years!!!
August 11th, 2008 8:25 pm
A little run on the bank over at Downey???
August 11th, 2008 8:38 pm
P.S.
I was thinking something yesterday and I thought I would share…
Why shouldn’t the mail be delivered only Moday - Friday door to door and delivered on Saturday to your box if you have one. Otherwise you wait until Monday. How much gas would that save? How much would we save in cities and towns on vehicles and vehicle maintinence etc. We would save a fortune as a country for a day of convienence…
What say YOU?
I say let’s start tomorrow and the only thing that I ask is that ALL OF THE SAVINGS be put into purchasing new energy conserving vehicles over time so we keep the momentum of savings and environmental issues close at hand as the ultimate goal here!!!
Just my thought…
August 11th, 2008 10:53 pm
where is Mr. Mortgage? Must be busy refinancing?
August 12th, 2008 1:55 am
[...] Mortgage: June Home Sales Report & Preview for This Week’s ‘Official’ ReportsMr. Mortgage’s Guide to the TRUTH! » Record Foreclosures Sweep CA in July - Breaking New… on Dr Martin Weiss Confirms Views on WaMu and Wachoviafeng on Record Foreclosures Sweep CA in July [...]
August 12th, 2008 2:04 am
1 million barrel of oil supply is basically offline now due to the conflict in the causcuses. The russians are now on their way to invade the capital of Georgia.
JP Morgan reports a 1.5 billion dollar write-down
Home prices have fallen 10% plus in the UK so far this year.
Downey and vineyard national are in trouble.
yippeeee, this means time for a market rally! 300 point rise and gold falls to 750 and oil falls too 100! what a merry day
August 12th, 2008 2:35 am
War is Peace.
Black is White.
Hate is Love.
Big Brother Loves You.
August 12th, 2008 3:14 pm
[...] Record Foreclosures Sweep CA in July - Breaking News [...]
August 30th, 2008 6:23 pm
I figured the priced would hit the fan in SoCal so I sold our house in September of 2004. I got top dollar for it. My mistake was staying in the mortgage business. Should have been selling houses instead. I’m out now in a totally different business, and selling foreclosures to cash buyers on the side.
The one rule in buying and selling assets that I live by: When the grocery bag boy is talking to the checker about buying (gold, houses, insert whatever here) while you are standing in line, then it is time to start selling.