[sdrebear]

I understand their desire to help homeowners in trouble, but first off, it was primarily the buyer’s fault anyway and sooner or later, they will just have to understand the simple fact that for a family with $60k in income/year in a home purchased for $600k at 100% LTV, there just simply ISN’T some other magical “affordable” loan out there.

Actually, there was… It was called an Option-ARM loan and I think we’ve seen how well that worked out.

[sdrebear]

I understand their desire to help homeowners in trouble, but first off, it was primarily the buyer’s fault anyway and sooner or later, they will just have to understand the simple fact that for a family with $60k in income/year in a home purchased for $600k at 100% LTV, there just simply ISN’T some other magical “affordable” loan out there.

Actually, there was… It was called an Option-ARM loan and I think we’ve seen how well that worked out.

[sdrebear]

I understand their desire to help homeowners in trouble, but first off, it was primarily the buyer’s fault anyway and sooner or later, they will just have to understand the simple fact that for a family with $60k in income/year in a home purchased for $600k at 100% LTV, there just simply ISN’T some other magical “affordable” loan out there.

Actually, there was… It was called an Option-ARM loan and I think we’ve seen how well that worked out.

[sdrebear]

I’m actually not shocked by this poll at all. Most of the people I’ve observed have heard about the downturn, but don’t think it affects them. Why should it? They still have pretty easy access to HELOC’s and such. They haven’t seen any effects from the rise in interest rates (yet). Until they are affected… they are un-affected.

It was this comment in the poll that I see causing some real pain over the next 5 years for those who are still rosy:

Indeed, 69 percent reported that they’re confident enough that they are likely to renovate or make some improvement in their home during the next 12 months, and 27 percent said they are likely to be moving on up, if not to the East Side, at least to a better house sometime in the next five years.

They won’t really understand what it means to have the bottom cut out of a market until they are the ones trying to sell and “move on up”. I just LOVE to read how the “experts” still think this “problem” is only in sub-prime. It’s like these people truly don’t understand how this whole system operates. I guess it’s also why people keep falling for ponzi schemes.

After a year or two of that, you’ll start seeing more people in the “upper” levels (an identifiable number) having trouble selling as those people in the “mid” level can’t sell and move up like they had planned.

I have never thought that this would be one big uniform “crash”. Because it will never really happen that way, people will continue to “not” think this is happening at all… just like the people in this poll.

[sdrebear]

I’m actually not shocked by this poll at all. Most of the people I’ve observed have heard about the downturn, but don’t think it affects them. Why should it? They still have pretty easy access to HELOC’s and such. They haven’t seen any effects from the rise in interest rates (yet). Until they are affected… they are un-affected.

It was this comment in the poll that I see causing some real pain over the next 5 years for those who are still rosy:

Indeed, 69 percent reported that they’re confident enough that they are likely to renovate or make some improvement in their home during the next 12 months, and 27 percent said they are likely to be moving on up, if not to the East Side, at least to a better house sometime in the next five years.

They won’t really understand what it means to have the bottom cut out of a market until they are the ones trying to sell and “move on up”. I just LOVE to read how the “experts” still think this “problem” is only in sub-prime. It’s like these people truly don’t understand how this whole system operates. I guess it’s also why people keep falling for ponzi schemes.

After a year or two of that, you’ll start seeing more people in the “upper” levels (an identifiable number) having trouble selling as those people in the “mid” level can’t sell and move up like they had planned.

I have never thought that this would be one big uniform “crash”. Because it will never really happen that way, people will continue to “not” think this is happening at all… just like the people in this poll.

[sdrebear]

paranoid-

So, New York City can fit over 8 million people onto 301 square miles (which includes an 843 acre park), but you don’t have the vision for how San Diego could add any more housing beyond what our current 1.2 million or so (San Diego City) residents need inside our 324.3 square miles?

If it needs to happen… it will. What others are telling you is that the “need” is not there right now. Based on MANY factors, it is unlikely that this is a real problem for many, many years still.

Others are right though. San Diego had better do A LOT to increase it’s business base, or that “need” will never materialize. (Personally, I’m good with it NOT happening).

[sdrebear]

paranoid-

So, New York City can fit over 8 million people onto 301 square miles (which includes an 843 acre park), but you don’t have the vision for how San Diego could add any more housing beyond what our current 1.2 million or so (San Diego City) residents need inside our 324.3 square miles?

If it needs to happen… it will. What others are telling you is that the “need” is not there right now. Based on MANY factors, it is unlikely that this is a real problem for many, many years still.

Others are right though. San Diego had better do A LOT to increase it’s business base, or that “need” will never materialize. (Personally, I’m good with it NOT happening).

[sdrebear]

I'm certainly not sure what "all the costs of living" add up to, but a quick eyeball of CL Real Estate in North Jersey shows me a different picture of the most expensive of living costs. I’d say they are at about half price across the board on RE.

Not to mention the reasons given to their VP by many of them on their exit interviews backs up my assertion.

Also not too sure what DOESN’T look cheap to a C-level exec of a $150+ MC company! 🙂

[sdrebear]

I'm certainly not sure what "all the costs of living" add up to, but a quick eyeball of CL Real Estate in North Jersey shows me a different picture of the most expensive of living costs. I’d say they are at about half price across the board on RE.

Not to mention the reasons given to their VP by many of them on their exit interviews backs up my assertion.

Also not too sure what DOESN’T look cheap to a C-level exec of a $150+ MC company! 🙂

[sdrebear]

More anecdotal evidence:

Signed a year lease back in September on a single family 2 bedroom house (it’s a very small house, but yes, it’s a house, not a condo) for $1,900/mo in NE Pacific Beach. At the time there was virtually nothing on the market similar and we were VERY lucky to get it. For fun I check Craig’s List to see what is out there. Just today in the $1,800 – $2,200 range in Pacific Beach, there were over 20 comparable properties posted in the first 8 days of June with a large portion of them being single family homes.

One home I saw I know very well and it is for rent at a lower price than when I went to see it last year. It was put up in May and obviously didn’t rent as it’s back up again just yesterday.

My observation has always been that homes vs rentals is ultimately a zero sum game. There will be ebbs and flows to how and when people shift between owned property and rented property, but ultimately there are four main drivers to the rental prices.

1. Total population
2. Overall home supply
3. Number of people under one roof
4. Average area income

With nothing else changing population wise, people going back and forth between rentals and owned properties ultimately does nothing. Unless there are people who have bought up properties and are happy to just keep them empty for some reason to depress the overall supply.

With respect to that, I only see people leaving SD right now. I have a friend at Sony in the marketing dept. She said that the New Jersey office closed and they offered everyone there a job in SD (some high paying marketing jobs). They all QUIT rather than move here!

[sdrebear]

More anecdotal evidence:

Signed a year lease back in September on a single family 2 bedroom house (it’s a very small house, but yes, it’s a house, not a condo) for $1,900/mo in NE Pacific Beach. At the time there was virtually nothing on the market similar and we were VERY lucky to get it. For fun I check Craig’s List to see what is out there. Just today in the $1,800 – $2,200 range in Pacific Beach, there were over 20 comparable properties posted in the first 8 days of June with a large portion of them being single family homes.

One home I saw I know very well and it is for rent at a lower price than when I went to see it last year. It was put up in May and obviously didn’t rent as it’s back up again just yesterday.

My observation has always been that homes vs rentals is ultimately a zero sum game. There will be ebbs and flows to how and when people shift between owned property and rented property, but ultimately there are four main drivers to the rental prices.

1. Total population
2. Overall home supply
3. Number of people under one roof
4. Average area income

With nothing else changing population wise, people going back and forth between rentals and owned properties ultimately does nothing. Unless there are people who have bought up properties and are happy to just keep them empty for some reason to depress the overall supply.

With respect to that, I only see people leaving SD right now. I have a friend at Sony in the marketing dept. She said that the New Jersey office closed and they offered everyone there a job in SD (some high paying marketing jobs). They all QUIT rather than move here!

[sdrebear]

At: FormerSanDiegan

Did RE/MAX merge with the WWF or what ?

HAHAHAHAHAHAHAHAHAHAHA!!!!

That was classic. Thanks for the laugh!

[sdrebear]

Some of this “Subprime Fix” stuff is pretty funny.

I like the last line of that article.

And many borrowers have already demonstrated their credit worthiness by making two or three years of payments during the initial, fixed part of the loan. It’s only when the loan resets at much higher rates that many of them fail to make payments.

Ummmm… Yeah, they’re all so “credit worthy” by paying “teaser rates” that are set lower than prevailing rents!! Ohhhh, they were such great “owners” there for a while!

What a joke.

What’s even funnier is that they actually believe these people can even AFFORD a fixed rate loan at 6.75% (or any percent really). A fixed rate 30 year loan at that rate is probably just as large a payment shock as their suicide loan was at reset! If these FB’s could have refied to a fixed rate loan, don’t you think they’d have already done that? It’s not like they needed Congressional permission to switch loans or something!

[sdrebear]

Sure glad you guys commented on Mark S. I was so confused after reading his post that I wasn’t sure where to start. So I won’t.

I saw that BB said that the problem in sub-prime was contained. While we all know that is BS from Mr. BB, I received some industry news (I’m in marketing/advertising) that is one of many countering this notion.

Newspapers Suffering from Lower Real Estate Advertising

Real Estate is very wide reaching and old Ben better be careful how many feet enter his mouth at one time.

Here is the pertinent excerpt:

While some analysts warn not to draw conclusions from a single data point, the ad-revenue future for newspapers does not look bright. Younger readers coveted by advertisers are not reading print papers, and classifieds revenue is drying up due to problems in the housing market.

[sdrebear]

Another one in straight despair.

Lennar Homes Sucking Wind

My 3 favorite paragraphs:

In January, Miller laid out a yearly earnings goal of $3.69 per share in hopes that the job market would stay strong, the economy would continue to be healthy and the new-home market would demonstrate “traditional, seasonal improvement.”

On Tuesday, Miller said, “Given the state of the market, we do not expect to achieve our previously stated 2007 earnings goal, and we are not comfortable providing a new earnings goal at this time.”

New home orders were down 27 percent year-over-year, to 7,132, while housing starts were down 38 percent year over year. Lennar said its cancellation rate was 29 percent.

[Author]

Posts