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If this market corrects from it’s peak 2005 –it could be 6 years till it fully bottoms out. Unless the Feds do a miracle of some sort.–Still the fundamentals of pricing in SD are out of line.

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It’s scary to think that Americans could be as “clueless” as this article implies. It begs the question as to whether they are literate. Very very sad commentary.

What’s even more frightening is all the talk about authorities (those who spend our tax dollars) stepping in to bail out the “victims”. Coddling the masses until we are a nation of numbskulls. Who cares if we cannot read?

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Maybe the LA Times should start a charity for FBs.

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“I am a strong advocate of subprime lending,” Dodd said. “I don’t want that word to become a pejorative as junk bonds did.”

uummm….he is a “strong” advocate of the worthless lending standards that have created this “subprime” mess and caused the failure of several lenders…

but he doesn’t want “subprime” to become a pejorative as junk bond —i.e., “junk loan” but that is what it is….

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“That’s the worst part…all the assh($es who headed companies like New Century, etc. knew what they were doing. At the end of the day they sold their stock options and walked away leaving the stock holders & the government (Fannie Mae & Freddie Mac) aka TAXPAYERS holding the bag.”

Agree – no one could be blindsighted by this –if they were an exec.

May the various State AGs can find a way to prosecute them under some consumer protection or trade laws.

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By Jonathan Heller
STAFF WRITER Union-Tribune
March 7, 2005:

“Remember that scene from “It’s a Wonderful Life” in which George Bailey is waiting at the railroad station for his brother to return from college? He says wistfully: “You know what the three most exciting sounds in the world are? … Anchor chains, plane motors, and train whistles.”

Many residents of downtown San Diego complain that blaring train whistles in the middle of the night hardly contribute to a wonderful life.

” There’s a sadistic SOB who just lays on the horn at every intersection,” said Phil Gorman, who recently moved into the Watermark condominium complex on India Street.

The noise problem is the latest byproduct of downtown’s rapid residential growth.

Today, 20,000 people live downtown, and an estimated 60,000 more are expected in the next two decades. Many of the condominiums are being built on land that once belonged to the railroads.

More than 125 sleep-deprived residents crammed into the Downtown Information Center on Thursday to demand that the Centre City Development Corp., the city’s downtown redevelopment agency, do something about the noise.
The agency has been working on the problem since mid-2004 and hopes to silence the whistles within 16 months.”

Does anyone know if they were successful in silencing the train whistles?

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I’m a conservative, but I can see if nothing is done…how many households will be displaced- and what affect will that have on communities?

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“Two years ago, when Lewis was looking for a larger house, she easily prequalified for a nearly $700,000 house even though she had no down payment and a spotty credit record. It helped that she was willing to take on two loans to cover 100% of the cost…….I wasn’t completely aware of the mortgage terms but I knew it would adjust in two years,” she said. “Properties were still going up at the time, so I felt it might be a good time for me to buy.”

A $700K debt with a $4000 monthly mortgage. The article doesn’t state what her income is, but one must be making a VERY good income to afford that mortgage. How can someone who earns that much….blow it soooo badly and make the statement ‘I wasn’t completely aware of the mortgage terms.”

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http://www.dqnews.com/ZIPCAR.shtm

CIty chart from DQNEWS

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DQNews reported that for Jan 07 Coronado prices were down 15.45% Ie, a home priced one year ago $1,375,000, sold for $1,162,500.

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My first question regarding current home purchases is to know the quality of the loan–if it’s more subprime, it’s more of the same garbage.
Where will the current subprime borrowers find refinancing as lending standards tighten and the $$ dries up?

Considering this NYT article:
http://www.nytimes.com/2007/03/05/business/05lender.html?ex=1330750800&en=8b1c3efaa3457cbc&ei=5088&partner=rssnyt&emc=rss

it is a disgusting and blatant testimony that confirms again that SoCAL was a playground of bogus lending. Maybe newly-made “New Century” millionaires are coming in to buy up all the property —- otherwise, who is going to afford the current prices – especially while standards tighten. Common sense tells you that a $50K median income cannot afford a home 10X that. The subprime lending market will dry up. New Century is one example –facing investigation and not expecting to make a profit for the next 6 mths…how many banks are willing to continue this risk?

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“He doesn’t have to worry about his retirement. He’s never had to worry about anything. He just doesn’t want to have the economy collapse until after he’s out of office so someone else will have to face the music. If that requires ginning up the reports, meddling with various government departments and telling outright lies to the public, so be it.”

George Bush is not the only one. I have read that over 1/2 of those who enter the Senate and House are already millionaires when they take office. And…they receive the best health care amongst their perks.

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“A separate study by John Karl Scholz, an economist at the University of Wisconsin, Madison, and two other researchers found more than 80 percent of households headed by Americans born between 1931 and 1941 have accumulated their optimal wealth targets for retirement.”

This may be true for people in my parents’ age group.

But this is not true for boomers –those born after the end of WW2—-through the early 1960s who are the largest group heading for retirement.

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It contradicts the what has already been reported — that average credit card debt is about$10K and individual debt has risen. Also savings is reportedly -1%. Many people don’t understand how debt grows with compounding interest. I personally don’t know anyone –who is “saving too much” for retirement.

In today’s market, if the average American makes $43K and the average San Diegan makes $50K —how can anyone be “saving too much” for retirement? No one has that kind of excessive income.

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The bubble would not occur if lending standards were tighter when the feds lower rates.
How is it that financial insitutions, whether huge or small didn’t see the magnitude of the subprime fallout.
What this mess feels like is a grand experiment by Greenspan —and all of the others who are financially untouchable and manipulate big economic decisions via hype. This is like the build up of believing in tech because the sky was falling as we “reset” for the year 2000 and some ethereal disaster was impending. 2000 came and went —and with it all the doom hype.
If rates were to go below 5% and conservative lending practices were the standard, ie, documentation 20% down, fixed rate…then no bubble could happen. Flippers could not assume the amount of “risk,” already being over-financed elsewhere….and most people could afford some kind of starter home —-in some neighborhood, not paying $400K for a 40 year old ranch worth no more than $130K, if that.

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