[powayseller]

Thanks guys, for the compliments, although it was unexpected.

[powayseller]

It is the dollar amount of loans that will adjust. I’ve done the math on that before, assuming each loan averages $400K. The problem is not the amount of additional credit or interest paid, but the number of people affected. With high debt and negative savings, we Americans are just not equipped to handle 50% – 100% increases in our mortgages. I expect a huge swell in inventory, from current 25,000 to 50,000 or even 80,000. Most of them will be in foreclosure.

Oh, and for those from the other thread who need clarification of fact vs. opinion: the inventory and foreclosure estimates are opinions.

[powayseller]

carlisle, my strong and witty writing style balances the ueber-spin meisters in the real estate and government industries. I have fun with it, and hope you do too.

Are you mad at David Lereah for saying “real estate never goes down, never has, never will” ? Are you upset with Greenspan for saying “there is no tech stock bubble, and there certainly is no housing bubble; we can identify bubbles only after the fact”?

[powayseller]

sdr, what do you think about the locations of the other pre-foreclosures and foreclosures in Carlsbad?

[powayseller]

AN, just ignore him…

[powayseller]

To the person who started this thread: “I” is spelled with a capital letter. It’s not “i”.

[powayseller]

I wish my post was still up, so it could be judged on its own merits. I consider Jim a friend, and my post an excellent analysis and follow-up of Kelly Bennett’s Option ARM piece. Any perception of ranting and raving and bullying is a curious interpretation. sdrealtor, did you read it, and what did you find offensive? My post was about the speech given by Jim Dugan, Comptroller of the Currency, on Option ARMs. Is he a bully too?

It’s very interesting that the people most upset about my Option ARM posts are the ones who have them. If your Option ARMs are so useful and great, then I should not be a threat. Just ignore me, or make a rebuttal.

[powayseller]

I used to say that the peak was summer 05, because that’s what Rich was telling us. He was adamant that summer 05 was the peak. About 4 months ago, I changed my mind, based on the inventory data and observations from Bob C. Since then, I have been saying the peak was in spring 04, and I have written at least a dozen posts about that. Quick refresher: change in inventory, and the ripple effect. No gut feeling needed; the data is all there if one knows where to look. For SFH, the peak was in summer 05, as the ripple effect took one year to work up. These charts, as well as the charts I am working on, corroborate that spring 04 was the peak for this cycle. Understanding the ripple effect on the way down would have given any seller the time needed, one year perhaps, to sell.

[powayseller]

A 63% drop. I am called extreme for suggesting it could happen here, because we are different. Hey, are we different? Perhaps their housing bubble dwarfed ours?

[powayseller]

MaxedOutMama, I had not thought of this before, but you’re absolutely right! Once they properly write down their assets, their book value could well shrink 50-70%. So will their stock.

[powayseller]

My oldest is 15, and she still doesn’t drink soda. They were all breast fed and they eat almond butter& jelly sandwiches on bread w/ #1 ingredient = cracked wheat berries (no white flour), water or 100%juice + fruit (today it was watermelon) for lunch. However, I learned when they were toddlers to be flexible, after I saw my daughter gorging down an entire pack of potato chips at a picnic.

Another food additive to avoid: benzene. Benzene has been found in 3/4 of all diet sodas tested, and many US sodas are therfore banned in Britain.

British authorities ordered four brands of sodas pulled from shelves because of benzene contamination. In contrast to the FDA’s policy of withholding test results from the public, “The [British Food Standards Agency] rushed out results yesterday of tests on 149 drinks including a range of fruit juice, iced tea, squash, fizzy and low-sugar drinks,” according to an April 1, 2006 article in The Times of London.

“FDA’s data show that 79 percent of diet soda samples tested over a six-year period from 1995 through 2001 were contaminated with benzene at levels above the federal limit for benzene in tap water.

The FDA test results, buried deep within an obscure FDA food testing program called the Total Diet Study, were posted on EWG’s Web site, http://www.ewg.org, just days after a top FDA official assured the public that there was no threat from the presence of the toxic chemical in soft drinks. This weekend, Great Britain’s public health agency pulled some soft drink products from store shelves because of benzene contamination.”

I know this if off-topic, but since we are discussing the health of children, I want to bring up a topic that few people even know about. Most processed food contains some genetically engineered ingredients, since 80% of our corn and soybeans are genetically modified. They are *not* required to be labeled, and the FDA and food industry has been fighting any consumer requests for labeling. Although they are banned in most of Europe, the FDA has been a strong proponent. Anything made of corn, such as corn syrup or corn meal, is probably geneticaly modified. GE foods are made by combining the DNA of TWO DIFFERENT SPECIES. This is very different from hybrid or natural mutation, which is a natural evolution within the same species. GE seeds and animals are made in a laboratory, not by nature.

Genetically engineered food is made from seeds that are spliced with DNA from one or more species (fish + plant, bacteria + plant, etc.) Pioneer’s “Roundup Ready Corn” is spliced with a bacteria (or virus?) gene, which makes it resistant to Roundup so the farmer can spray the entire field, including the corn you will buy, with Roundup and the weeds will die but the corn won’t. GMO fish is sterile and grows larger; it is spliced with a gene from tomatoes.

One form of GE food is bovine growth hormone. I’ve bought organic and GE free milk since my kids were babies. So far, so good: none have hit early puberty. The rise in asthma and early puberty, as early as age 3, has been documented much lately and is attributed to the excess hormones in the food. I buy only organic chicken. I was heavily influenced by ayurvedic medicine since my college days, and made sure my kids ate according to the seasons and their body type (even did all that infant massage stuff with warm organic sesame oil, but they never laid still like the babies in the video).

Look for “GMO free” on the label. Organic rules were modified a few years ago, despite protests from the seed cmopanies, so you are safe from any DNA-altered foods when you buy organic. But hey, my husband doesn’t care – he loves anything high-tech. He says that if it’s science, he will eat it. LOL! IMO, eating GMO is like eating DDT or smoking cigarettes. We won’t know how bad it is for a few more decades. The research is either not being done or suppressed. So I tell him he can eat all the genetically modified food he wants, but the kids and I will choose not to.

IMO, the the best rule: limit anything in a package. The fresher, the better. The fewer ingredients, the better. Spices are foods too: turmeric, basil, dill, cayenne, coriander, etc. are just as important to eat every day as mangoes and whole grains. As I’m writing this, I am drinking my Coke. No diet drinks, either. That Nutrasweet stuff is really unehealthy!

[powayseller]

Realtor Jim Klinge says Davidson builds superior properties, and superior properties will not lose more than 5-10% during this downturn. “…. a few examples of superior properties to keep an eye on….Tracts built by Davdison Communities. Typically tracts fall into inferior-properties category, because you’re married to the comps – if there are a couple of low sales of your same model, you’re sunk. But if there was one builder who can beat the odds, it’s Davidson. ”

Jim has great info on his blog, like the comment that tract homes fall faster because you’re married to the comps, or his post about how to spruce up your home because buyers expect a perfect house, or his explanation that you make your money when you buy so avoid power lines or a backyard that people can look down on or being in a flight path. I love his blog.

But that doesn’t mean I agree with his prediction of where the market is headed. The question is: what was the price of the properties he considers “superior”, back in 1999? If we increase those prices by 3-5% annually out to today, what would be the value of those homes? How much do they need to fall to get to that? Also, if superior properties hold their value better, does that mean they are *always* a multiple of 25-35x annual rent, rather than the 8-10x annual rent that has been explained to me? In other words, do “superior properties” defy fundamental analysis today and in the past?

BTW, there are 4 foreclosures on Hospital Way and Highland Dr, and 22 preforeclosures in zip code 92008, 2 foreclosures and 11 preforeclosures in 92010.

[powayseller]

In defense of our track home posters, people mispronounce the word. It sounds like “track”.

My biggest complaint in the reversal of “I” and “me” when another person is in the sentence. People correctly say, “I went shopping”, but when their friend comes along they think that “I” should be replace by “me”. So they incorrectly say “Suzy and me went shopping”; it should be “Suzy and I went shopping.”
“He walked to Suzy and I” should be “He walked to Suzy and me”. Again, people correctly say, “He walked to me”.

[powayseller]

North County Jim, you’ve been reading my posts for 9 months now. Do I rant and rave like some lunatic LOL? You know my posts enough to draw your own conclusion.

After he erased my post, he admitted he was a little defensive about his own Option ARM, so that explains a lot. In my post, I quoted John Dugan, Comptroller of the Currency, about the risk of Option ARMs, and then estimated that half of people in San Diego with Option ARMs would end up in foreclosure. I should have known better than to make bearish comments about Option ARMs on the blog of a guy with an Option ARM.

I also commented that *we* all need to be more accurate with our analysis, so he took that personally, too bad. We need to stop our optimistic forecasts that have to be revised every quarter.

I love his blog and I think he has some great analysis and is a very good realtor. He is a little too optimistic, and I completely disagree that “superior properties” will be sheltered from the slowdown. He thinks Old Carlsbad and some other unique coastal homes are immune from any more than 5-10% price drops. Those homes can climb to the sky, but not fall more than 5-10%. That doesn’t even make sense. So I rebutted his theory, and he didn’t like it. No bad feelings from me, but definitely an eye opener as to how much good analysis some people can handle. Finally, I am working on my own website, which is taking me longer than I thought. It took me a couple minutes to make a blog, but it doesn’t have the features I need, so I am stuck on some issues with the website, some research I am doing, and busy with some personal things. I hope to have my website up by middle October, as originally planned.

[powayseller]

Where do you think Campbell went wrong?

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