San Diego Housing Bubble News and Analysis

I happen to know quite a few folks that aren't paying their mortgages right now. These aren't deadbeats or dirtbags, either. These are, for the most part, solid middle class professionals. They've decided that its better to just not pay and see how long they've got before the bank moves in and takes over.

In some instances, we're taking 18 months and counting. I know a coach in Temecula who recently moved to another house because he was tired of waiting for the bank to foreclose. My understanding is that he waited for over a year and banked something along the lines of $50K due to not paying. When I asked him why he didn't wait for the NOT, he said his wife was tired of the stress of wondering when the bank would evict them and felt that moving now was better than waiting.

What is telling is the attitude most people now have and that is largely that the banks and Wall Street have gotten away with what amounts to outright theft, so who cares if they do? Its an "all bets are off" sort of mentality.

it's difficult to buy a house in this kind of environment.

Here's an article about hotels going to foreclosure.

The big boys are walking so why shouldn't the individual homeowners walk too?

“The W is a situation where the asset value declined to below the value of the debt, and as a public company we have a fiduciary responsibility to our stockholders to give the asset back,” he said.

http://www3.signonsandiego.com/stories/2...

the post title really got my attention.

I thought someone posted up the story of a family friend currently living in 4S. they have not been paying their mortgage for the last 6 months, their loan modification fell through, and a few weeks ago the whole family went to disneyland and spent a few nights there too.

not immigrants, they are one of those lazy white people... =) j/k

That's the recycling I'm talking about.

Those peak houses will be recycled one way or another. Anybody who keeps on paying on a peak purchase mortgage is simply not with the program.

Going to Disneyland is punishment. Disneyland incorporates all aspects of the corporation. If they weren't paying their mortgage, they should have been saving it for rough times ahead.

I have to admit, I am pretty interested in how the "recycling" takes place with some of the holdouts.

Yes, this is what I've been seeing, too. Who can blame them?

I've heard a different version; "The banks and Wall Street got a bailout, so where's mine".

Some peak buyers will deny having made a purchasing mistake until the end. They will give up moving up because of their own pride.

Some peak buyers will see their neighbors get the benefit of foreclosure and loan modifications and they'll join the party.

Some peak buyers will join the party too late and they'll only get the left-overs, or nothing.

Some peaks buyers will have to sell for organic reasons (job loss, divorce, illness, etc...). They will get dragged to the party willing or not.

I'm betting that 20 years from the peak, you'll see few houses purchased at the bubble peak that are still owned by the peak buyers. Proportional to other periods, the turnover of peak properties will be much higher, in my estimation.

That would be a great research study for a real estate/economics graduate student. He can pour over all the county data and write his paper. Some students will get PhDs writing about the "recycling" process.

I have a theory of peak buyers having diminishing wherewithal or diminishing desire/inclination to hang-on.

Remember that in economics, the ability to pay is only part of demand, the desire and willingness to pay makes all the difference.

Even in the high-end discretionary real estate purchases, I see people giving up.

Here's an example at Harbor Club, Downtown. I think this is only a matter of time before the bank takes it back. I see that everyday.
http://www.sdlookup.com/Property-5BF7B53...

Time will tell...

I think my husband would rather pay someone else's mortgage than go to Disneyland.

I concur, in spirit. I just don't understand the fascination.

I get the feeling there are a significant number of households that have chosen to pass on the mortgage payments. Without any housing expenses they are able to keep up the lifestyle front.

It seems as though just about everyone knows atleast one person that stopped paying and are living well.

Sad to say but everything is going the Disneyland way.

What about Cheese Cake Factory or PF Chang or California Pizza Kitchen? Or for that matter the master planned housing developments?

It's all going the Disneyland way. They win because they provide people the controlled environment and the safely that people want (or believe they need).

Id estimate that two far larger forces are in effect for Disneyland than people not paying their morgage. (though I suspect a few are living large on the hog with borrowed time/money)

1) The dollar is low right now. This means other people come here, and we stay here.

2) In tight times like these, people cut spending on the kids last. Sure it is frivilous spending, but it is all ok, cause it is for the kids. (Think of the children, man, Think of the children! )

Also, this was the weekend before Halloween. My brother has two little princesses at home, and both went to Disneyland this week. In comparison to Florida last year, two days at Disneyland is dirt cheap. (and yes he is still paying his morgage)

i personally would not go to disneyland unless you paid me $100/hour.

Wells Fargo have refied a first and a second on my friend's home.

He is concerned they will exercise the power of sale on the first forgoing a deficiency (One Action Rule) but will sue him personally for a judgement on the second (= unsecured promissory note).

Anyone have any ideas/solutions?

TIA Rick.

We never told our kids there was a Santa Claus. We said it was all men in red suits, which they verified quite easily. We earned their complete trust by not fibbing to them about that. Now, when I tell them there is no such thing as Disneyland they fall for it hook line and sinker.

Disney is not for every body, that is for sure. 100 degree plus heat with summer crowds - not my idea of the 'happiest place on earth'. With that said I am a huge fan and go at least once a year. There is something special about sitting at an outside table in New Orleans Square, Dixie Jazz band playing, watching the paddle wheeler chug on by. Hard to explain other than Walt just got this little piece of the world right.

On topic: No question there is a lot of non mortgage paying disposable Disney dollars out there. More on the way.

CBad, Russell and Scaredycat--Great replies! Laughed out loud each time! It is a good to know that there are others in the universe that don't want to go to Disneyland.