A broken clock is right twice a day. People who are permanently bullish or permanently bearish are constantly calling the bottom or calling the top. Since market prices go up and down, both bulls and bears are eventually right.
The permanently bullish come in two flavors. The self-serving spinmeisters of the NAr, and the optimistic economists and financial reporters who want to tell people what they want to hear. realtors believe they have to be bullish to induce people to buy homes. realtors show a callous disregard for the financial well being of their clients in order to generate a sales commission. realtors will tell people prices have bottomed even if they don’t believe it. realtors need potential buyers to believe prices will rise so that the buyer will make money from a house purchase.
Economists and financial reporters also love to call the bottom. Everyone who owns anything wants to hear the value of their holdings is going up. Whenever prices decline in any market, economists and financial reporters are keen to call the bottom and make investors happy. Since so many own real estate, economists and financial reporters are especially keen to call the bottom of a real estate decline.
Barry Ritholtz recently documented the plethora of bottom calls since 2006. It’s astonishing how frequently, consistently, and incorrectly the NAr and various econiomists and financial reporters called the bottom.
Yeah! The Housing Bottom Is Here! (PWBC™)
By Barry Ritholtz – May 31st, 2012, 7:10AM
… These bad calls reoccur every Spring, as the data begins its annual improvement. I use the phrase Perennially Wrong Bottom Callers and its acronym PWBC™ (I may have to trademark that!).
… Spring has sprung, and the usual suspects are up to their old tricks. There are so many bad PWBC that it is really difficult to make special mention of anyone, but we are compelled to point out two PWBC in particular: Alan Greenspan, who was wrong early and often, and the National Association of Realtors, whose spin has been astoundingly consistent, bullish and wrong, the whole way down.
Barry’s list is extensive, but for the sake of brevity, I will only quote the fervor reached in the last week of May of 2012.
Real estate could be on the rebound(DelMaravnow May 27, 2012)
“the national market, which saw sale prices in April jump nearly 5 percent higher than the same month last year, the Commerce Department said Wednesday. The number of homes sold was up nearly 10 percent, too.”
Housing Market May Finally Be Turning Around With Sales Up 10 Percent In April (Huffington Post, May 28, 2012)
Housing Prices Show Signs of Stability (Wall Street Journal, May 29, 2012)
“Sinking prices have made a mockery of their exhortations, but the S&P/Case-Shiller index of home prices in 20 major cities is showing signs of stabilizing.”
“But if prices really are turning the corner, that has positive implications for banks’ and consumers’ balance sheets.”
U.S. Home Prices: Has the Tide Turned? (ABC News, May 29, 2012)
“Average home prices rose in March compared with February in most of the 20 cities in a Standard & Poor’s/Case Shiller survey out today – the first time in seven months there’s been a gain. This report adds to the growing evidence that the worst of the five-year housing slump appears to be over.”
Home prices at post-bubble lows but may point to market stability (LA Times, May 29, 2012)
“Home prices in the U.S. ended the first quarter at their lowest point since the housing crisis, with values in 20 major cities dropping 2.6% in March compared with the same period a year earlier.”
“Analysts believe the data could signal stability in the turbulent housing market, if not a nascent turnaround.”
The Housing Bottom Is Here (Business Insider, May 29, 2012)
“The headline sequential gain for the 20-city composite was just 0.09%, bit below the 0.2% that analysts had expected. But it’s obvious: Housing is bottoming.”
“As S&P’s David Blitzer said on CNBC today: Housing is ‘a whole lot better than the headlines’”
“The bottom line: Every single measure out there is showing gains price gains.”S&P: Home Prices See New Bottom, Recovery On Deck (Reverse Mortgage Daily, May 29, 2012)
“The rate of decline has moderated, however, suggesting that a recovery is near.”
Not everyone is buying it. While I believe it’s possible housing has bottomed, particularly for the below-median price points, I think it’s very possible that the liquidation of shadow inventory could push prices lower still. If we only focus on the above-median segment of the housing market, particularly in place like Orange County, I think it very likely the values of those homes will fall further. If there is an epic crash yet to happen, it’s with high-end real estate.
I am not as sanguine as the bottom callers, nor am I as downbeat at the bears. It’s difficult to predict government intervention or the behavior of the banking cartel, and these are the primary factors influencing housing market pricing. However, some market watchers are downright negative, and Keith Jurow is convinced a market crash is imminent.
Over the last several months, Keith and I have developed a regular correspondence, and we have spoken at length on the phone about housing issues. Where he lives on the East Coast, the amend-extend-pretend policy is widespread. No segment of the market has crashed there like the low end of our market has crashed here. Since many New England states have judicial foreclosure laws, and since the banksters live there, they have much more shadow inventory and far fewer foreclosures — so far. Whereas I think the low-end markets in the non-judicial foreclosure states are near bottom, I agree with him that the judicial foreclosure states and anything above median has yet to experience real pain.
KEITH JUROW: Prepare For The Coming Housing Collapse
Keith Jurow | May 30, 2012, 8:31 AM
After being one of the few analysts who was correct in stating for the past two years that there is no housing bottom in sight, it’s time for me to tell you what I see ahead.
Housing pundits are nearly unanimous in declaring that housing markets are showing signs of bottoming. This is nonsense!
What is Really Happening Now
We hear that California markets are showing signs of revival and that prices are rising in certain markets. Let’s see. Here are the latest figures from trulia.com.
In Los Angeles, trulia reports that the average price-per square foot for homes sold in February through April was down 9.3 percent year-over-year for 3-bedroom homes and down 8.7 percent for 2-bedroom homes.
In San Francisco, allegedly one of the hottest areas in the nation, the 3-bedroom average price-per-square-foot was down 4.7 percent year-over-year and 1-bedroom price-per-square foot was down 8.1 percent.
Price-per-square-foot statistics are the best way to compare prices because it does not matter how large the house is. Median prices are skewed by square footage as well as by the percentage of distressed properties sold.
I totally agree with his reliance on price-per-square foot as the best measure of house price trends. The OC Housing News report relies on it.
Wouldn't you be embarrassed to overpay by $100,000? Only fools buy houses without knowing neighborhood values. Don't be a fool. Don't suffer the pain of an underwater mortgage. The surest way to lose your house is to overpay for it. Our reports identify overvalued and undervalued neighborhoods. Use it to broaden or narrow your search area. Savvy buyers work with us to find bargains. We've saved thousands from financial ruin. Let us save you too. If you want peace of mind while shopping for your next home, sign up for our monthly market newsletter.
Here in Connecticut where I live, double-digit price declines are commonplace:
Fairfield County – down 10.7 percent year-over-year
Darien – down 13.5 percent
New Canaan – down 15.7 percent
Norwalk – down 13.8 percent
New Britain – down 15.3 percent
Branford – down 15.9 percent
City of New Britain – down 15.3 percent
City of Hartford – down 14.4 percent
These statistics come from Wm. Raveis & Co.’s website – raveis.com. …
No matter how long the liquidations are delayed, when they finally occur, prices fall. Lenders have been pretending the market would stabilize for five years, and the lack of move-up buyers and widespread insolvency are taking their toll. The few foreclosures they have processed have been pushing prices substantially lower despite all the hoopla about improving conditions.
Serious Mortgage Delinquencies – The Real Story
We have been told that the rate of mortgage delinquencies has been declining over the last year. Let’s see.
In the NYC metro area, the banks drastically cut back foreclosing on properties in the spring of 2009 and have never changed their policy. This has nothing to do with the robo-signing scandal which occurred 18 months later.
Lenders have used every excuse imaginable to delay foreclosures. In truth, they simply don’t want to because they must recognize losses and the resulting REO crushes the real estate market.
In late 2009, the NYS legislature passed a law requiring all servicing banks in the state to send a “pre-foreclosure” notice to all delinquent owner occupants. …
Through the end of March 2012, a total of 192,000+ pre-foreclosure notices had been sent to delinquent owners in NYC. This does not include delinquent investor-owned properties because the law did not require servicers to send notices to them. There are lots of 2-3 family homes in the four outer boroughs of NYC. I estimate that there are roughly 75,000+ delinquent investor-owners.
This means there are roughly 265,000 seriously delinquent homeowners in NYC who have not yet been foreclosed. Why so many? The banks do not foreclose in NYC. As of May 24, foreclosure.com reported a total of 301 foreclosed properties on the active MLS and 103 in Brooklyn.
Those are astonishingly large numbers, and they are accurate. One of the problems with estimates of shadow inventory we have here in Orange County is that the numbers are voluntarily reported to organizations like CoreLogic rather than mandatory reporting from the state. I have long contended these numbers are underreported and the problems are much larger than widely known. Keith’s research proves this in New York City.
At their current rate of liquidation, it will take forever for the market to clear there. If you have to clear up 265,000 bad loans and you are processing only 300 per month, it will take 883 months, a whopping 73 years!
Why the Collapse is Coming
Despite all the mortgage modifications, refinancings, and cutbacks in REOs for sale that have taken place in the past 2 ½ years, prices continue to decline. Will this change anytime soon?
Let’s take a look at potential buyers. It’s an undeniable fact that the trade-up buyer is gone in every major metro market. Most of those who would like to sell and buy another house are unable to do so. Their house is underwater and their equity is gone.
This is an undeniable fact. With prices at 2003 levels in Orange County and much lower in other areas, very few who purchased in the last decade have any equity, and with rampant mortgage equity withdrawal, many who purchased 15 or 20 years ago are similarly under water. With no equity, there is no move-up market.
I talk to Phoenix broker Leif Swanson on a regular basis. He has explained that the few normal sales he closes are for sellers over 70 years old. Because they have owned the property for decades, they have equity. The trade-up buyer of the past – ages 30-60 — has disappeared.
Who is going to buy all the Southern California homes priced over $800,000? I don’t know, and lenders don’t know either. There is no market for these. The people who would ordinarily be taking a few hundred thousand dollars of equity to make a move up are broke. There are almost no sales above $800,000, and inventory is abundant even in our depleted market.
That leaves first-time buyers and investors. According to Inside Mortgage Finance, their survey of roughly 2,500 brokers nationwide finds that roughly 30 percent of all purchases nationwide are by investors, many paying all-cash. Some analysts have argued that this is a good thing for housing markets. This is rubbish. There aren’t enough potential all-cash investors to make-up for the collapse of the trade-up market.
Furthermore, investors are concentrating in the sand states where prices have collapsed more than anywhere else – Arizona, Nevada, and Florida. Prices have plunged so much in the past year here in Connecticut because there are not many investors.
Plus, investors do not buy overpriced high-end homes. They don’t cashflow. The reason many of the subprime markets are nearing the bottom is because prices are low enough to attract cashflow investors.
That leaves first-time buyers. Do you really think there are enough potential first-time buyers out there to keep prices from declining further? …
No, I don’t. There are certainly not enough first-time buyers to absorb the inventory priced over $800,000. Very few first-time buyers have the savings or the borrowing power to raise more than that.
Had it not been for the FHA’s program of mortgage insurance, buying by first- timers would have collapsed. The latest FHA Single-Family Outlook revealed that 78 percent of all purchase mortgages went to first-time buyers.
When you look at securitized mortgages bought or guaranteed by Fannie Mae and Freddie Mac, the picture is very grim. In the fourth quarter of 2011, 80 percent of all Fannie/Freddie mortgage originations were refinancings. The average down payment was 30 percent. How many first-time buyers can put that much down?
Very, very few. For every prodigious saver, there are three Ponzis who spend everything and then some.
More recently, an April 2012 Federal Reserve Board survey of bank loan officers found that fewer than 4 percent of those surveyed said that their bank had eased mortgage lending standards for prime mortgages.
Credit standards will continue to tighten as private money enters the market. Without loan guarantees, lenders are far more cautious.
Worst of all is what I’ve been saying for more than a year. A growing number of prospective first-time buyers are reluctant to buy even though they can afford to. Their attitude is this: What’s the rush? I think prices are headed lower. And I like the flexibility that renting gives me.
As prices continue to decline, this new attitude feeds on itself – it becomes a vicious circle.
Changing this attitude is one of the many reasons lenders are withholding inventory to create a bottom. Back when lenders first began to collude on prices back in 2009, they hoped to engineer a bottom for the same reasons. Once buyer psychology changes, its very difficult to change it back.
What About the Potential Sellers?
Over the past two years, I have written extensively about the so-called “shadow inventory.” It’s real, growing and very scary in what it says about where things are heading.
You need to keep in mind that the total number of underwater homeowners is far larger than just those who purchased during the bubble years 2004-2007. Millions of homeowners took out what became known as “cashout” refis. Banks were only too willing to shovel out cash to owners whose homes were rising at double-digit rates.
I love that Keith is bringing more attention to HELOC abuse.
What has been almost completely overlooked by the media is the enormous number of properties with second liens. There are still nearly 12 million home equity lines of credit (HELOC) outstanding. It’s safe to say that 98 percent or more of these properties are underwater. Roughly 30 percent of all HELOCs were originated in California. There are millions of owners there with HELOC balances in excess of $100,000.
We see the fallout from this nearly every day on this blog.
The HELOC boom began in 2003. Most of these revolving lines of credit were interest-only loans for the first ten years. After that, they convert into 15-year fully amortizing loans. This means that beginning next year, these loans start to transform into a fully-amortizing loan. The number of HELOCs which do this increases in 2014 and even more in 2015 and 2016.
I didn’t know that. We have a new threat of recasting loans to worry about. In all likelihood, lenders will modify those terms to kick the can down the road again, particularly since these loans are worthless.
What will these homeowners do when their HELOC payment soars from a few hundred dollars per month to more than $1,000?
First they will try to borrow money to make the payments (Ponzi borrow), then they will strategically default.
Conclusion
… Do I see anything on the horizon that could turn things around and correct the growing imbalance between potential homebuyers and sellers. No. Nothing whatsoever. Wishful thinking won’t do it.
… Within a year, I expect many of the weakest markets to show signs of unraveling. Perhaps the most vulnerable market is the entire NYC metro area. Sooner or later, the banks will have to start foreclosing or even doing short sales. When these properties hit the market in significant numbers, I have no doubt that prices in the entire region – where 19 million people reside – will collapse.
I have been expecting this for five years now. The banking cartel shows no signs of ending amend-extend-pretend. They truly believe they can delay the crash indefinitely. So far for the above-median market, they have. Keith thinks the crash will come, but what will be the catalyst? Will the November elections foretell the end of times?
For other major metros, the plunge will depend on how crazy the bubble was during 2004-2007 and how large the total number of underwater owners becomes.
Predictions are always iffy. But I am convinced that things will get ugly from here and that there is no solution that can prevent this collapse. The wisest thing is for you to do is prepare for the worst. Is there anything wrong with renting a nice house or condo to ride out this perfect storm?
No. Renting is a good idea. Anyone who considers buying should always look at renting as a viable alternative, particularly if prices are trading above rental parity.
So what say you? Are the housing bottom callers right this time?
La Palma Overview
Median home price is $422,000. Based on a rental parity value of $504,000, this market is under valued.
Monthly payment affordability has been worsening over the last 2 month(s). Momentum suggests worsening affordability.
Resale prices on a $/SF basis increased to $254/SF to $260/SF.
Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months.
Median rental rates increased $0 last month from $2,116 to $2,116.
Rents have been falling for 10 month(s). Price momentum suggests falling rents over the next three months.
Market rating = 3
Proprietary OC Housing News home purchase analysis 
5221 LA LUNA Dr La Palma, CA 90623
$463,000 …….. Asking Price
$430,000 ………. Purchase Price
6/3/2003 ………. Purchase Date
$33,000 ………. Gross Gain (Loss)
($34,400) ………… Commissions and Costs at 8%
============================================
($1,400) ………. Net Gain (Loss)
============================================
7.7% ………. Gross Percent Change
-0.3% ………. Net Percent Change
0.8% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$463,000 …….. Asking Price
$16,205 ………… 3.5% Down FHA Financing
3.75% …………. Mortgage Interest Rate
30 ……………… Number of Years
$446,795 …….. Mortgage
$118,127 ………. Income Requirement
$2,069 ………… Monthly Mortgage Payment
$401 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$116 ………… Homeowners Insurance at 0.3%
$465 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
============================================
$3,052 ………. Monthly Cash Outlays
($315) ………. Tax Savings
($673) ………. Equity Hidden in Payment
$20 ………….. Lost Income to Down Payment
$136 ………….. Maintenance and Replacement Reserves
============================================
$2,220 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$6,130 ………… Furnishing and Move In at 1% + $1,500
$6,130 ………… Closing Costs at 1% + $1,500
$4,468 ………… Interest Points
$16,205 ………… Down Payment
============================================
$32,933 ………. Total Cash Costs
$34,000 ………. Emergency Cash Reserves
============================================
$66,933 ………. Total Savings Needed
——————————————————————————————————————————————-
We're sorry, but we couldn't find MLS # P822133 in our database. This property may be a new listing or possibly taken off the market. Please check back again.
 |
$569,000 5242 LA LUNA Dr |
0.04 miles 4 bd / 2 ba 2,112 Sq. Ft. |
|
 |
$469,000 8182 SANTA MARGARITA Ln |
0.07 miles 4 bd / 1.75 ba 2,112 Sq. Ft. |
|
 |
$569,000 5242 DEL SERRA Cir |
0.13 miles 4 bd / 1.75 ba 2,112 Sq. Ft. |
|
 |
$549,000 5212 DEL ESTE Cir |
0.23 miles 4 bd / 2.25 ba 2,112 Sq. Ft. |
|
 |
$590,000 8181 SUFFIELD St |
0.34 miles 4 bd / 1.75 ba 2,093 Sq. Ft. |
|
 |
$539,000 7841 NANCY Cir |
0.43 miles 4 bd / 2.25 ba 2,257 Sq. Ft. |
|
 |
$618,000 5381 PEMBURY Dr |
0.51 miles 4 bd / 2.75 ba 2,126 Sq. Ft. |
|
 |
$569,000 7881 BARBI LN., |
0.55 miles 4 bd / 2.75 ba 2,193 Sq. Ft. |
|
 |
$549,000 4861 GRACE Ave |
0.56 miles 4 bd / 2.75 ba 2,000 Sq. Ft. |
|
 |
$599,000 7851 WESTRA Ln |
0.61 miles 4 bd / 2.5 ba 2,077 Sq. Ft. |
Sign up for the OC Housing News monthly market newsletter.
See the enormous foreclosure pipeline for yourself below. Enter location and press search. Scroll through list by pressing "next."
29 Responses to “Are the housing bottom callers all wrong… again?”
Sorry, the comment form is closed at this time.
The simple fact that ‘extend and pretend’ does NOT equate to resolution is all that people need to understand about why bottom callers are wrong again.
The deflationary washout is coming.
US 10 year Treasury Notes now below 1.50%….Just wow
It’s likely headed to near 1%.
The yield curve is pancaking, could go inverted soon.
Can you imagine… income, housing, GDP, durable goods orders, employment and industrial production have not recaptured previous highs before entering the next economic downturn cycle.
The US 2-Year note went negative yesterday. Today the yield is currently 0.0075%.
Okay People … get ready for new LOWER mortgage rates as the 10-Year bond is yielding 1.49%. The unemployment rate bumps up to 8.2%. The US produced 69k jobs last month (not that I even believe that).
I never believed this bullshit story of America in an economic recovery. We are in an economic depression. This one is different from the 1930′s in that the FED is circling the wagons to protect asset prices, and that only leads to a long drawn-out drip, similar to the lost decades (x2) of Japan. We will get no post-war explosion like the 1950′s.
The sound of printing presses can be heard at the Federal Reserve.
Freddie Mac: 15-Year Fixed Falls Below 3%, 30-Year Fixed Hits New Low
Following lower bond yields, the 15-year fixed fell below 3 percent, while the 30-year fixed set a new record-low as well, according to Freddie Mac’s Primary Mortgage Market Survey.
The 30-year fixed-rate mortgage dropped to 3.75 percent (0.8 point) for the week ending May 31. Last week, it averaged 3.78 percent, and last year, it was 4.55 percent.
The 15-year fixed slid into new territory, averaging 2.97 percent (0.7 point), down from 3.04 percent. A year ago at this time, the 15-year fixed stood at 3.74 percent.
The 5-year ARM averaged 2.84 percent (0.6 point), up from last week’s average of 2.83 percent. A year ago, the 5-year ARM averaged 3.41 percent.
The 1-year ARM remained unchanged from last week at 2.75 percent (0.4 point). The previous year, it averaged 3.13 percent.
Frank Nothaft, VP and chief economist for Freddie Mac, pointed to market concerns over the Eurozone, which led to a decline in long-term Treasury bond yields, as one reason for the drop in fixed rates.
“Compared to a year ago, rates on 30-year fixed mortgage rates are almost 0.9 percentage points lower which translates into nearly $1,200 less in annual payments on a $200,000 loan,” said Nothaft.
Bankrate.com also reported record-lows for fixed rates.
The 30-year fixed dropped to a new low of 3.94 percent, down from 3.97 percent last week. The 15-year fixed averaged 3.15 percent, also a record low. Last week, it was 3.19 percent.
The 5-year ARM slipped from 3.02 percent last week to 3.01 percent this week.
Bankrate’s national weekly mortgage survey includes data from the top 10 banks and thrifts in the top 10 markets.
I am with you on housing prices continuing to drop but I really do not see a declining economy. I see continued albeit modest growth.
Manufacturing sector still healthy
Continued moderate job growth
Corporate profits at at all time highs
Continued upward momentum in capital goods orders
It seems to me like this is no indication of a recession – just weak, slow growth. And I agree with Lee that this could last a decade or more.
I don’t want to come off as I’m a perma-bear, gloom and doomer. I actually hate negativity … but I’m a pragmatist who will not plant my head below the soil line. We are indeed in a depression … corporate profits are short lived due to reduced expenses from productivity gains and the Federal Reserve QE/operation twist. We can’t have a sustainable economy with the govt borrowing .40 cents on every dollar it spends, and the Fed back stopping the debt and equity markets.
Our economic recovery was nothing more than smoke and mirrors.
I with you. Many have labeled me a permabear, but I am a pragmatist committed to reality. The reality is not rosy.
“corporate profits are short lived due to reduced expenses from productivity gains”.. I couldn’t agree more. Working for a large Corp we have seen our workforce reduced by thousands and anything that can be outsourced has been. What’s left are burnt out employees, barely functioning IT systems and business processes. Having outsourced to companies that have no vested interest in our business and laid off key knowledgable people how can this be good for the future of this well know Corp.. US manufacturing etc may look good now as Clueless writes, as does Fidelity preach to us for our 401K’s but once Corps cut back too far you end up with no where else to go for profit apart from increased sales.. but whose left to do that and where are the new sales going to magically appear from..
Thankfully, I read every single day of this blog: after wating out almost the entire bubble, I took the opportunity to leave SoCal after 60 years of living there to take a job in “emerald coast” panhandle area of Florida. I would recommend this move to anyone.
I will always read this blog and enjoy the comments very much too, but I couldn’t resist buying a nice house. I know prices will fall still, but somehow I don’t care any more; I’m tired of moving, and it’s nice here.
I got FHA terms. I’m too old to pay it off, but FHA is assumable at 3.5% 30 yr fixed wow. And I didn’t even have to dent up my savings too bad for the 3.5% down.
$270,000 for a 2700 sq ft 1990 custom 4+3 on beautifully landscaped half acre, not a fixer, screened in pool, close to stores, restaurants and doctors, a beach resort within 5 miles and beautiful St Andrews bay all around within 1/4-2 miles. I couldn’t get that in SoCal for a million dollars. The neighborhood is the very best one in our area, neighbors houses are mostly all bigger and better than mine!
I should pick up a new nickname. Maybe “lucky so and so.”
Congratulations! Sound like you found a little piece of heaven. I lived in Central Florida for seven years. The State has much going for it. I hope you enjoy your new life there. And thanks for your continued readership.
Florida has the most oppressive climate I have ever experienced for a good 6-8 months of the year. Plus it is ground zero for the Zombie Apocalypse.
http://www.examiner.com/article/police-shoot-naked-cannibal-during-zombie-attack-miami
You do have to get used to the humidity, but IMO warm weather is easier to adjust to than cold weather. I grew up in Wisconsin. In the winter in Wisconsin, there is never a time you can go outside and be comfortable. In Florida, even in the peak of summer temps in July, the mornings and the evenings are still comfortable. You stay in doors during the afternoon, but the rest of the day is great.
LOL, @ zombie apocalypse.
Seriously, the panhandle is nowhere near as hot as Miami. The rains are dramatic, but warm and blow through quickly leaving a perfect day for outdoor fun.
For example, we had a torrential storm this morning, but very brief; it’s gone and now beautiful outside. there’s going to be a street fair tonight with free rock bands in the street and a big free hot rod show.
I’ve been here since February 10th, so okay summer is coming and we’ll see how that is.
Cannibal Zombies are no laughing matter!
Seriously though…what an insane story. I just read World War Z and within a week of finishing it this happens.
Hello TO Renter…
I second the congratulations. I wish I could post my e-mail address, as the thought of leaving California sounds more and more appealing…especially for the housing prices you are paying. I am assuming you have central AC in the home? That would be a requirement given the heat/humidity there. It’s nice when someone finds an affordable home in an area he or she really likes.
All the best…
Many thanks for congratulations.
AC yes and we even get our own wells and water softener too. Everything is electrical though, no natural gas hardly anywhere around the bay. I have to buy a new dryer. There’s a septic system instead of sweres and no curbs or sidewalks hardly anywhere. It’s like country living, but not really because everything is close at hand.
Trouble brewing in primeARM and primeFRM RMBS-land…..current valuations are not related to fundo’s.
Take a look at these bubbles(induced back in Nov by the commencement of operation twist that ends Jun30) click on each indice.
look out below…..
31-May-12 Overview
http://www.markit.com/en/products/data/indices/structured-finance-indices/primex/primex-prices.page?
How are these numbers interpreted?
The indices provide the speculator with exposure to AAA tranches of P-L, prime jumbo RMBS.
Essentially, the numbers (comp price) represent perceived value…. the lower the daily settlement price, the lower the expected performance of the particular instruments contained in each basket.
Once inside the indice, just click on the constituents tab to view the basket contents.
Savvy?
I love the emerald coast! It was better 26 months ago, before BP poisoned the gulf and all sealife. BEWARE OF THE SEAFOOD. LOCALS EAT IT AND IT IS BAD. We have a unit on Perdido Key. Get a pass to Johnson Beach, the most beautiful beach I have ever experienced, you can camp on it and build a fire, but no doggies allowed. You picked a wonderful place to move to, stress free.
I heard that the BP spill really did a lot of harm. I didn’t hear about the sea food, so I’ll check on that.
Really the gulf looks pretty clean to me. A whole lot cleaner than Laguna Beach, CA. Let alone Huntington, Long Beach or Malibu. The sands are several shades whiter too than the whitest SoCal sands I’ve ever seen.
I don’t see much waves to play in. People seem to go hang gliding, wind surfing, snorkeling, fishing and boating.
The upper half of the single family housing market is susceptible to “the wealth effect”: so that when that top of US households feels scared, or poor, or skeptical…they cut back. Just a little caution, or sometimes, a lot. It doesn’t help their skepticism when the markets they follow, stocks, bonds, savings, keep struggling or as today, plummeting, and it doesn’t help when our dear leaders are leaderless and the opposition is more noise than light.
A small example of those with almost no credit:
About one in five U.S. households owe more on credit cards, medical bills, student loans and other debts that aren’t backed by collateral — so not including car loans — than they have in savings, checking accounts and other liquid assets, according to a new University of Michigan report.
“Some families have not been able to make substantial headway,” said Frank Stafford, an economist at the U-M Institute for Social Research and co-author of the report, in a statement.
The above summary then opens the inquiry into the fact that black households, hispanic households, and lower 25% white households, have been almost entirely wiped out of net equity.
Another factor seldom addressed as to where the buyers are: When we say “households” buy homes, how many of the “households” who buy a home to live in, in Orange County, are two employed spouses? If it takes two employed spouses to buy a home, and even one spouse has a worrisome job or income situation or no job, that household is effectively out of the market. This double worker, double income household is what significantly built the bubble and perversely, made women go back to work as homes spiralled up in cost and it kept getting far too expensive to live the good life with “only” one worker. That women-work-to-get-that-good-life factor led to demand for more colleges (debt) building education and medical facilities (debt) and so on.
Far too many people live paycheck to paycheck and endure mountains of consumer debt. I’m not surprised so many have a negative net worth.
Driving around LA I feel like I’m witnessing the calm before the storm. Here we have thousands of people living a fantasy existence in an unsustainable economy. They drive leased luxury cars, pay their nannies or private schools, go out to restaurants, take vacations, STILL buy over-priced homes or pay mortgages on underwater mistakes. And yet our infrastructure is collapsing, college debt is soaring, jobs are scarce and even ridiculously low interest rates can’t keep the wheels of commerce spinning. Our entire lifestyle is a sham and a joke. If you were an unbiased observer your jaw would hit the floor when confronted with the absurdity of this mess. I realize banks and the government are doing everything they can to prop up the poseurs, but the well will run dry. When that happens our entire concept of a modern American lifestyle will be turned on its head.
Great post. I couldn’t agree with you more. Sooner or later the entire house of cards will collapse. Having the government prop up all asset classes can only last so long. There will be an end game to this, it simply can’t go on forever.
I’m sure the Romans thought their empire would go on forever too…it’s no different this time out. WAKE UP PEOPLE AND PAY ATTENTION!
Look you have to look at why the housing market collapsed in the first place and has any thing changed and indicate a bottom and also an emprovement in the economy.Well the answer is no, in fact the economy has become worse than 2008 when everything collapsed.Nothing has been done to fix the banks and all that toxic crap is still on there books.The US has been printing money like there will be no tomorrow and yet spending is still out of control and getting worse, and at the same time wars are getting spread and fought all across the middle east increasing more on military spending.Fraud is rampant in Wall Street and all the banks are commiting fraud as well.Then there is the unemployment which has continued to climb and more baby boomers are leaving the work force to collect there social security and use of medicare.More factories are leaving the country and setting up shop in China and other low wage countries like India,Vietnam,Bangledash etc.etc..So now you have read of some of the problems the US has and will face and it is just a taste of things that are happening and believe me when I say nothing has been fixed since the 2008 crash and what is ahead for you will scare you half to death.Rent don’t buy live within your means and save and if possible purchase physical silver and gold and hold pocession of it and hide it well because the future will get worse before it gets better and please remember the three G’s and that is Gold ,Guns,and a getaway plan.Food stocking and water is also a smart Idea.I am not parinoid but the evidence is there to read and this is global.