San Diego Housing Bubble News and Analysis

MDAL, I could easily be wrong but the cap gains is only for short sales, a repo will leave the original buyer with a judgement for the 200k loss to the lender not a tax gain, then bk dodges the judgement. Having never walked away or sold short, purely speculation from what others have told me. Lenders will likely never take a 40% loss on a short, they are being weenies on 10% shorts. From memory of the last cycle, VA haunts people for that loss, don't know about private lenders.

You have pretty much predicted what will happen to your neighbors. There isn't any good way out of this, that is why we are returning to having to qualify for loans. I ran their numbers on bankrate's affordability calculator and with their income, factoring no debt other than a $300 car payment they qual for a max purchase price of 272k, had they stayed within their means they would be fine. Affordability calculators don't use random numbers, they are formulas to predict successful repayment. They violated a fundamental economic rule and now the rule has come back to violate them. (that last one liner was for SD, ask and ye shall receive).

I give it a 6... okay but not on par with any of the scooby do or hitler references.

I agree with you TG but didn't post as I am not positive nor am I an accountant. It would seem to me that IRS treatment of a short sale will differ from a true foreclosure or deed in lieu of foreclosure depending on the short sale situation (original purchase money verses a refi or HELOC)

BK could be a good idea. There is a question about a deficiency judgement as well.

Affordability calculators don't use random numbers, they are formulas to predict successful repayment.

Does this mean that with the return of actual risk estimates the number of jobs lost in RE, will be balanced by all the actuaries getting their jobs back? Jinkies.

-one muggle

This was discussed on an prior thread some time ago, wish I could recall where. I was under the same assumption as you mdal, but if I remember correctly the ultimate outcome on the thread was the same as TG's reply.

I've heard from a couple of friends that people are starting to "get smart" about this whole loan debacle. They put their house on the market for what it would take to pay off the loan(s) and if it doesn't sell after a few months, they stop making payments and live rent free until they are forced to move out - at least 6 or 7 months. They are able to save $$ on living expenses during those months - I'm assuming they shut off their sprinker systems in addition to not paying their mortgage. From what I understand, "purchase" loans are non-recourse; the only thing that will happen to these people by walking away is bad credit. However, with refinance loans banks have recourse to get a judgement against the borrower to compensate the bank for their loss. For people that didn't refinance and are underwater, Cramer is probably right that they should just walk away.

For those that refinanced, things are much worse in my opinion and those people probably should look into filing for bankruptcy. It would be up to the lenders to decide whether it's worth going after them to get the $$ back.

duplicate

Speaking of Murrieta: I was at the Chick's Sporting Goods off of Murrieta Hot Springs road today. As I was waiting to get back on MHS to turn onto the 215 and head back to Fallbrook, I happened to look over at a car wash at the light. There had to have been at least two dozen new cars there getting washed, and nice stuff: Caddie Escalades, BMWs, Lexi, etc. I saw a Range Rover, a couple of big GMC SUVs and several nice German sports sedans in the Chick's parking lot as well.

I look at these cars and the Stepford Wives driving them and keep thinking: HELOC. This is a middle class bedroom community fer God's sake! Where in the hell are these people getting the money for these cars?

Note to self, go to chicks sporting goods and car wash to check out hot wives.

TG: Dude. I am not kidding on that one. I think the majority of these women enjoyed a career in exotic dancing prior to moving up to the Good Life in Temecula and Murrieta.

You can literally get whiplash at Pop Warner games in Temecula and Murrieta. Thank God for sunglasses!

Alan, I hear you brother, but lets keep this on the down low. As a 40 y.o. divorced guy always looking for his next ex wife, I don't need busloads of dudes cutting in on my action. Repeat after me, it's too hot, it's too far away, there's too much traffic, lather, rinse, repeat.

Wanna really put your sunglasses to the test, hit the wineries on a Saturday when the desperate housewives of orange county pour into town, those O.C. plastic surgeons have mad skills and have obviously been on the receiving end of some serious heloc money.

TG: You wanna really think twice (or more) about hooking up with one of those overly Botoxed OC harridans. I worked up in the OC for a while and developed a passionate loathing for that place. A loathing I might add only slightly less severe than my loathing for all things LA.

You're gonna snare one of those collagen lipped, buxom succubi and wake up missing your house, credit cards and new SUV. Just a fair warning, amigo.

Haha I got a good chuckle out of this one.

Better bet- for a single guy like myself, save up for a trip to Brazil next year during Carnaval. That would be more fun and easier on the finances and less risk.

Well, try being a divorced mom approaching 40 in OC, having to compete with these bimbos! I don't have fake nails, boobs, hair or eyelashes. I don't spend big bucks on makeup, clothes, bags or shoes - I shop at Target! I have an advanced degree, and am financially secure because of hard work and skill, in spite of my ex-husband's profligate spending habits. And when I work out, I like to get really sweaty and not lift 3-lb girly weights.

In other words, most men (and probably you guys, too, as much as you like to bash the bimbos, that's mostly what you really want) around here assume I'm a lesbian!

For the record, I'm not ;-)

irvinesinglemom: As I said before, I spent enough time in both OC and LA to have developed a real antipathy for bimbos, both male and female.

As the amount of intelligent conversation around here should indicate, I don't really believe the guys or gals on this post are looking for a mate with an IQ somewhere slightly below the room temperature.

On a personal note, this ain't my first rodeo and I got the bimbo fixation dealt with around my junior year of high school. Smart is sexy; dense ain't. Besides, they all look the same anyway. What fun is that?

Irvive and Alan, I was being facetious in my posts, this thread wandered away and I was just playing it for kicks and the newfound fans/stalkers. No advice needed Alan but it is appreciated, I've already delved into my own distorted version of habitat for humanity and have no intention of repeating the experience. Irvine, if you weren't on the other side of the dreaded 91 and I wasn't already dating someone I'd offer to buy you a drink because the cold reality is that many of the braniacs on this site (I'll take a leap of faith and include myself in order to make my point) really only shine in the presence of intelligent and real women who appreciate mental stimulation and can provide it in return. Women who have flaws, insecurities, busy lives and brains, just like us and just like you, so please don't lose faith in us a species or lump us into one category and I won't assume you are a lesbian, not that there's anything wrong with that (Seinfeld joke inserted specifically for SD Realtor).

OK, this thread has wandered since I started it, but I will wander with you.

Irvine and temeculaguy, if you are looking, try the internet. Avoid Fashion Island, Temecula Wineries and the Chick's parking lot.

After my first wife sued me for divorce when I was halfway through a brutal three month course of chemotherapy I had to wonder if I would ever feel like dating again. Turns out I did, and I met my wonderful new wife on Yahoo! personals six months after the Doctors told me I had remission.

She is attractive, highly educated, and can really handle investments. My ex-wife, like Irvines ex-husband, really could spend the $$$ and I will never forget the dress bought in Paris where she didn't know the exchange rate, and the $150.00 haircuts at Bergamot Station.

Match.com is terrific.

JS

Keep it wandering guys! The world needs more threads like this. For once its nice to have a positive image of Temecula. I always assumed it was the gun-in-one-hand, bible-in-the-other capital of the lower half of the socio-economic spectrum. It appears I was wrong and there are some superficial, yet physically attractive women there! Thats something, don't overlook it. I mean if you gotta live in Temecula, you might as well have some nice scenery, because the actual town has done a great job of ruining what was one of the most beautiful spots in inland So-Cal. Temecula could get its own, "Real Men of Genius" bud light radio ad any day of the week, twice on sundays. You guys have given me something really deep to think about, er um look at.

Josh

I agree trashy bimbos not my thing either.

I am waiting for the implosion in Temecula to complete. Since I am a wine affionado it would be nice to perhaps have a weekened retreat there to enjoy the wineries and so forth. If prices drop in Temecula by 50% I would bit on a new home up there. For now, I am hedging bets on Texas and waiting for the knife to finish in southern California.

Mixxalot: As a wine aficionado, why on God's earth would you go to Temecula? Hopefully, not for one of those overcooked whites or sickly sweet champagnes.

You do know that Sonoma county is getting swamped right now by foreclosures, right? You could pick up a nice place in Sta Rosa and be close to both Napa and Sonoma. Plus, the scenery is gorgeous. Yes, I am biased, having grown up there.

Course, neither Napa nor Sonoma are overrun by what I call "OC Specials", those vaguely Stepfordish looking gals sporting thousands of dollars worth of aftermarket products.

You are right about one thing and it is sad: Temecula has some wonderful history dating back to the opening of the American frontier and it has been completely subsumed by suburbia.

I still keep an eye on my old tract house neighborhood in French Valley. My next door neighbor moved in within about 1 month of me - both of us moving into new houses. He put really tacky poorly installed (did it himself) $1 ceramic tile throughout the whole house upstairs and down. About 6 months in, he mentioned that the sun was bleaching his carpets. Turned out he couldn't afford window coverings until he could get the first HELOC 1 year after purchase. Soon after they had a boat and 2 off road vehicles (the kind for one person only).

The zillow satellite photo is reasonably new (because I can see the people who bought our house changed the landscaping some) and the next door neighbors still have their huge dirt backyard without so much as a bit of concrete or grass for the kids to play on. They bought the house in 2002, so if they hadn't HELOC'd, they'd be up $175k or so. I'll be watching to see if they eventually sell and how low the prices go around there. They are around 2004 prices now.

1) They will not owe any tax on the shortfall if the lender forecloses and sells the property for less than what is owed.

2) The best play would be to get themselves into a cheap rental and knock out the CC debt as opposed to going BK. Ironically, they could probably knock out a nice chunk of that debt by stopping all housing payments and sending that $$ to Visa...

3) This type of scenario should increase as more loans are re-cast and property values continue to fall. At some point in time, if values fall enough, I would expect that even folks who can afford the re-cast may walk away if the disparity between ownership and renting is large enough to convince them to crash their credit.

Speaking of nice rides, (not the women!) I had a garage sale on Saturday and was stunned at how many non-english speaking folks fallling out of their Escalades, Durango's, and Exprdition's.
I can't figure out how they pay for them, unless the entire group that fell out of the vehichle pooled their $$ to come up with the payment.

"I can't figure out how they pay for them, unless the entire group that fell out of the vehichle pooled their $$ to come up with the payment."

I think you don't have a very multi-cultural life experience. The are many logical reasons,including the one you mention, for "non-english" speakers to have nice cars. Anybody can enter the blue collar world easily. Don't hard working, english speaking, blue collar, people have nice cars? The possibiities go on in many directions from there.

Firstly,
Don't jump to any conculsion of my "muliti-cultural life experience" since you have NO idea what race/culture myself or my family are and/or live. You are way off on that one.

Whether someone speaks english or not is not really the just of my post. I don't care if one speaks 5 languages or one, I still find it hard to believe that so many people drive around in 50K+ vehicles, on the average wage in this town.

Yes,I see many "hard working english speaking, blue collar people" and I also see very young people of all races driving around in these types of vehicles, and again I am astonished that the average joe can REALLY afford them. Drive by the high school down the street, and they are parked everywhere.

That was my point!

irvinesinglemom,

Don't despair; not ALL guys in So Cal are superficial. You sound perfect. I'm happily married but I'm sure there are a few decent single guys still out there, but I agree they're probably the minority nowadays. By they way, if I thought you were a lesbian that would make me even more interested!

Since we are way off topic I'll chime in. Why would a lesbian be interesting to a married man? Are you a porn freak?

condogrrl, we guys are just... different from you

Patient renter in OC

Same at Symbolic Motors

In looking at Lotus Elise for a weekend track car I noticed a lot of folks from Mexico who spoke little English shopping for 300k Ferraris and Lamborghinis. Nothing against that just as there are tons of wealthy Americans there are plenty of wealthy folks in Latin America as well. Heck.. Carlos Slim is the richest man on the planet and he is from Mexico.

Of course, intelligence and beauty together is best.

But if had to choose, I'd go for beauty since I think I have enough smarts for two, ha.ha.

Well-educated, know it all girls are hard-driving and boring. Nice and charming girls are more pleasant to be around. I hate to say it, but there's a reason middle-aged professional women can't find husbands.

Upper middle class American women are demanding and a nag. Plus they are not that well-learned. Russian and Chinese women have PhDs and are much more pleasant; plus they can play the violin and cook.

*** I'm only 1/2 serious/kidding but there's some truth to this.

I was also 1/2 kidding - the last part anyway. This all just shows to go ya how upside down things are these days. There's some truth in almost everything.