[PerryChase]

Fun site on David Lereah. BTW, what’s the origin of Lereah? Sounds like a Lebanese or Middle Eastern name of some kind (no offense intended, just curious).

http://davidlereahwatch.blogspot.com/

[PerryChase]

According to 10 News, rents may stop going up because of lower occupancy.

http://www.10news.com/news/10784095/detail.html

Interesting Stats:
http://www.10news.com/download/2007/0118/10784196.pdf

http://www.10news.com/download/2007/0118/10784162.pdf

————-

I predict rents will go down once all the hidden inventory becomes available. My guess: 10% decline in rents between now and end 2008.

[PerryChase]

Thanks, for the UTC rent update.

hummm… let’s see. $1600 to rent 2bd/2bt at UTC or buy a condo conversion at Verano for $360k++ — a no brainer in my view.

[PerryChase]

Love her or hate her, powayseller has been right so far. She’s one of the first ones to write about the liar loans and to predict the implosion of the subprime lenders. She also predicted the new lending guidelines we are now hearing about in the MSM.

Roubini is an academic at NYU. He’s not selling anything but his advice. Wall Street economists all have something to sell.

Wall Street or industry economists are always optimistic in a circumspect way. They’d say something like “I expect real estate prices to turn around in 2008 ahead of the elections. But changes in the mortgage business may affect the ability of some buyers to enter the market. If a family wants to own a house they need to start saving for a down-payment today. A good down-payment will assure that they get into the house their want to raise their kids.”

Human nature is such that we never want to hear the bad news. We’d rather get the wishy-washy talk.

Personally, I admire the people who go out on a limb give it to us like it is.

[PerryChase]

He’s the Chief Economist, not the Chief Marketing Officer.

[PerryChase]

Yes, SD median will go down 7-8% in 2007.

In the next couple of years, housing will begin to implode. Iraq will devolve into full civil war and American troops will retreat. The Taliban will continue to come back to life and Karzai will be overthrown (probably by America) to be replaced by another figurehead president.

Those events will seal W’s fate as one of the worse presidents in US history.

I’m not hoping for those things to happen but life will be what it will be. It’s not being negative but realistic considering all the facts we have today.

[PerryChase]

“The extraordinary cost of the S&L crisis is astounding to every taxpayer, depositor, and policymaker. The estimated present value cost of the bailout of the Federal Savings and Loan Insurance Corporation (FSLIC) is $175 billion or more.

http://www.econlib.org/library/enc/SavingsandLoanCrisis.html

10 years from now, we’ll be reading papers such as these on the Subprime Meltdown.

[PerryChase]

The savings and loan crisis of the 1980s and early
1990s produced the greatest collapse of U.S. financial
institutions since the Great Depression. Over the
1986–1995 period, 1,043 thrifts with total assets of over
$500 billion failed. The large number of failures overwhelmed
the resources of the FSLIC, so U.S. taxpayers
were required to back up the commitment
extended to insured depositors of the failed institutions.
As of December 31, 1999, the thrift crisis had
cost taxpayers approximately $124 billion and the
thrift industry another $29 billion, for an estimated
total loss of approximately $153 billion. The losses
were higher than those predicted in the late 1980s,
when the RTC was established, but below those forecasted
during the early to mid-1990s, at the height of
the crisis.

Plus 1.16 billions in judgments against the US government, not counting the untold wealth lost in the early 1990s real estate crash. Remember the Japanese lost their asses on such assets as Pebble Beach, First Interstate Building in LA and Rockerfeller center in NYC, not to forget La Costa Spa and the Emerald tower in Downtown San Diego. Remember the 4-seasons in La Costa? The Japanese stopped funding it so it stood as a shell in the landscape for years.

http://www.fdic.gov/bank/analytical/banking/2000dec/brv13n2_2.pdf

The S&L crisis began and 1986 and concluded in 1999, or 13 years for clean up. Perhaps the Subprime lending mess will take just as long or longer.

Things change but really remain the same. It’s like prime time TV. The script is the same, the characters are different.

[PerryChase]

Bernanke calls for stronger regulation of Fannie Mae and Freddie Mac

By Jeannine Aversa
ASSOCIATED PRESS

11:10 a.m. March 6, 2007

WASHINGTON – Federal Reserve Chairman Ben Bernanke urged Congress on Tuesday to bolster regulation of mortgage giants Fannie Mae and Freddie Mac, and suggested limiting their massive holdings to guard against any danger their debt poses to the overall economy.

http://www.signonsandiego.com/news/business/20070306-1110-bernanke.html

[PerryChase]

What about David Lereah’s mommy? I didn’t fully get this. Would someone care to summarize or post a link?

[PerryChase]

PD, ha.ahaha, that’s funny. What? You don’t think that straight guys can be fastidious? Or use such vocabulary? I can rough it pretty well but I’d rather not do it at home.

I do a lot of laundry so that’s why I have a high-efficiency front-load washer. 🙂 Oh, I sort my clothes into 5 baskets as well. And the whites have to be washed in ultra hot water with a dash of bleach so they retain their brilliance. 😉 Do you notice the nasty towels people take with them to the gym?!

I admit I have some help with household tasks, otherwise I’d be running ragged. I feel sorry for the housewives who live in 4000sf houses and have to keep up with a full-time job, and the household chores and the husband. I picture all the clusterf*** mc mansions out there in suburbia.

[PerryChase]

That’s what I was also thinking pencilneck.

There’s a lot of chatter about lower rates ahead and Realtors have been relaying that to buyers/sellers. I doubt the lower mortgage rates will materialize.

People are still thinking they can borrow for 5%. 7% is more realistic in 2007.

[PerryChase]

greekfire, your posting made me curious about Rancho Del Oro, so I looked.
This example below is an illustration what what you were saying about Rancho Del Oro. SDlookup does not show the original sale from the developer in 1990 but it think that it was more. Looks like the original owner sold in 1995 at a loss after holding for 5 years. There’re going to be quite a few such cases in the future.

http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=071017444&page=1&property_type=SFR&mls=mls_sandiego&cKey=bfv5615f&source=SANDICOR
http://sdlookup.com/PropertyDetails/tabid/53/pid/FC387DC8/Default.aspx

783 MOSAIC, Oceanside, CA 92057**
List Price: $545,000 – $545,000
Sale History
08/24/1995 $158,000
1990 ???

Bedrooms: 4
Full Baths: 2
Partial Baths: 1
Square Feet: 1,957
Lot Size: N/A
Year Built: 1990
Listing Date: 03/02/07
On Market: 4 days
Type: SFR
Status: ACTIVE
MLS #: 071017444

[PerryChase]

Yes, we are a positive bunch. The realistic kinds.

I still want to know the direction of interest rates. Will the Fed be able to lower rates to alleviate the coming recession?

Will foreign investors demand higher yields to make up for dollar value loss, higher and the huge losses they are taking right now? If so, they’ll buy US debt at a discount resulting in higher interest rates.

I agree with bugs, the subprime meltdown is like the S&L meltdown. In the 1980s the S&Ls make easy loans to builders and land speculators. This time around the subprime lenders gave the easy loans to the buyers thinking that they could securitize away the risk.

Not only do we have the subprime market meltown, we also be faced with the bankruptcy of lenders to condo developers and converters. Think of the likes of Corrus Bank.

Yes, bugs, it’ll be worse this time around. But how much worse? Interest rates, the speed of the collapse in subprime lending, and the collapse of small lenders to developers, will determine how fast things will play out.

[PerryChase]

sdrealtor, having watched the market out of curiosity for a long time, and more seriously in the last 2 years since I decided to move up, I tend to agree with you.

Houses were selling for $250-$300k in North County beginning in 1988. I don’t see prices dropping to this level. All else remaining the same, those prices would be a real bargains.

But you never know, if mortgages rates jump to 10% then all hell will break loose. Psychologically, the market will be crushed.

I’m at a loss to understand how interest rates will move. Many say that the Fed will lower rates if there’s a recession. But the goal of the Fed is to keep inflation in check.

The dollar is loosing value, the subprime lending business is imploding. Foreigners are taking a bath on their American holdings. Would they not require a higher risk premium to lend more money to us? Would that not lead to higher mortgage rates?

[Author]

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