tag:blogger.com,1999:blog-35190061.post2515409063926302016..comments2023-10-17T03:59:01.588-07:00Comments on Doctor Housing Bubble Blog: Press Zero for Reset: Are we out of the Subprime Mess?Dr Housing Bubblehttp://www.blogger.com/profile/12407700951720008626noreply@blogger.comBlogger18125tag:blogger.com,1999:blog-35190061.post-41366566974559568902007-09-27T11:09:00.000-07:002007-09-27T11:09:00.000-07:00DocRead Depew's 5 things on Minyanville today? In ...Doc<BR/><BR/>Read Depew's 5 things on Minyanville today? <BR/><BR/>In addition to being spot on target with real estate, he is very funny. Maybe add him to your list of links, if he is copacetic with that? I think he's a must read, and he really is funny.Unknownhttps://www.blogger.com/profile/11815092488216012302noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-62564351790969441552007-09-26T16:16:00.000-07:002007-09-26T16:16:00.000-07:00Gee Linda, thanks for that really helpful informat...Gee Linda, thanks for that really helpful information. You're not a troll...<BR/><BR/>I apologize for tooting my own horn a bit, but I did predict exactly this a couple weeks ago here..and "we've only just begun"<BR/><BR/>(from the LA times)<BR/><BR/>L.A. County CEO cites concern for cash flow<BR/><BR/>Projected property tax revenue -- which provides a key part of the county's general fund money -- may decrease as home values continue to fall, he warns.<BR/><BR/>By Susannah Rosenblatt and Jack Leonard, Los Angeles Times Staff Writers <BR/>September 26, 2007 <BR/><BR/><BR/>Following years of rosy economic forecasts, Los Angeles County supervisors were warned Tuesday that the cooling housing market could cut into property tax revenue, which funds local services including public safety, health services and foster care.<BR/><BR/>Expressing concern, board members requested that the county chief executive update them in January on the fiscal outlook for the county's $22.4-billion budget.<BR/><BR/>"The market is slowing down right now, and we know how much [you] depend on property tax," county Chief Executive William T Fujioka told the board. "It's something we will have to look at."<BR/><BR/>In the 2006-07 fiscal year, property taxes grew 8%, compared with 11% the previous fiscal year. In spite of the current national sub-prime mortgage crisis, Fujioka estimates property tax revenue will increase 8% to 9% this fiscal year, which began July 1.<BR/><BR/>Property taxes constitute a majority of the money that the county can choose to spend as it sees fit, unlike federal funds, which are designated for specific programs. <BR/><BR/>Supervisor Don Knabe voiced anxiety that there was "quite a bit of difference between what the economic indicators are right now and what our presumed growth rate is. That's obviously of some concern."<BR/><BR/>County sales tax revenue that supports public safety was 6% below projections last fiscal year, which will cost the county about $40 million through July 2008, Lizzari said.<BR/><BR/>Fujioka will analyze the first round of property taxes received in mid-December and report his findings to the board in January in an effort to avoid the program cuts and layoffs of leaner budget years. <BR/><BR/>As home values fall, especially in recently developed northern Los Angeles County communities such as Lancaster and Palmdale, the county assessor has been fielding increasing requests from people wanting to reappraise their homes, Fujioka said. <BR/><BR/>The county's property assessment roll topped $1 trillion for the first time last year.thamnosmahttps://www.blogger.com/profile/08857645872263236111noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-52081828149202362332007-09-26T15:11:00.000-07:002007-09-26T15:11:00.000-07:00Great investment opportunity in Costa Rica.Costa R...Great investment opportunity in Costa Rica.<BR/>Costa Rica condominiums, condos for sale, Costa Rica homes.<BR/>Visit us for more information at ww.jaco-bay.comlindahttps://www.blogger.com/profile/01596914541246252642noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-333732588045929972007-09-26T14:12:00.000-07:002007-09-26T14:12:00.000-07:00@john s"They just have an agenda. Sell Houses."Lik...@john s<BR/><BR/>"They just have an agenda. Sell Houses."<BR/><BR/>Like Alec Baldwin said in "Glengary Glen Ross",<BR/>A - Always<BR/>B- Be<BR/>C- Closing.<BR/><BR/>Put down the coffee Barbara. Coffee is for closers.Unknownhttps://www.blogger.com/profile/10152290334113995168noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-45696933571534559722007-09-26T12:58:00.000-07:002007-09-26T12:58:00.000-07:00"One reader made the argument that housing prices ..."One reader made the argument that housing prices will be higher in 30 years"<BR/><BR/>Well gee, if I bought a total stock market index it would in all likelyhood be higher in 30 years as well. So assuming I had several multiples of the cost of my rent in disposable income (what housing costs in L.A.), why exactly should I invest it in housing rather than stocks? <BR/><BR/>And do most people really have that much extra money, or is it only that funny loans are easier to get to buy houses than to buy mutual funds.joannehttps://www.blogger.com/profile/09133131308676063300noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-56761979218288191952007-09-26T10:37:00.000-07:002007-09-26T10:37:00.000-07:00Doc et al,Read this on minyanville, directly aprop...Doc et al,<BR/><BR/>Read this on minyanville, directly apropos the 'reset' button, on Countrywide re-arming a portion of its portfolio. Moral hazard isn't specified by name, but is acknowledeged in practice:<BR/> http://www.minyanville.com/articles/bank-HOV-CFC-arms-ABX/index/a/14253<BR/><BR/>Oh, and the commenters that posted their posts - well, they conveniently ignored the 2005 and 2006 people who bought, the last ones into the Ponzi scheme, didn't they? Nice...Unknownhttps://www.blogger.com/profile/11815092488216012302noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-47589899624738093912007-09-25T15:12:00.000-07:002007-09-25T15:12:00.000-07:00People still think there is no housing bubble. Th...People still think there is no housing bubble. They profiled Patrick.net over at the San Francisco Chronicle today. The story is interesting but the comments take the cake; take a look at the comments:<BR/><BR/><A HREF="http://sfgate.com//cgi-bin/article/comments/view?f=/c/a/2007/09/24/BUKCS4NNB.DTL&o=1" REL="nofollow">Comments regarding bubble bloggers</A><BR/><BR/>People still think there is no bubble. You'll notice a common argument such as <I>"well if he would have bought in 1999-2005 he would be happy and would be rolling in green hundred dollar bills."</I> <BR/><BR/>You'll also notice that the main argument is prices will go up because they always have. People don't look at income/price ratios or economic trends. One reader made the argument that housing prices will be higher in 30 years. Bwahaha. And minimum wage will be $40/per hour. But will prices be cheaper next year? Yes. Two years from now? Yes. <BR/><BR/>Few people do make economically based comments on price jumps. Either way, we are standing at the Housing Alamo and no one is making the first move.Dr Housing Bubblehttps://www.blogger.com/profile/12407700951720008626noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-777109176487046012007-09-25T14:26:00.000-07:002007-09-25T14:26:00.000-07:00Two words that describe the denial in the Market b...Two words that describe the denial in the Market by Real Estate "Professionals"....<BR/><BR/> <BR/><BR/>Barbara Corchoran.<BR/><BR/> <BR/><BR/>In case you missed her, she's the industry's spokeshole that attempts to apply damage control, by being interviewed on MSNBC. Check out her latest video right here on MSNBC. (GO TO: http://www.msnbc.msn.com/id/20970287/ and click on the video of her.) Every time I see her she is trying desperatley to temper fears by injecting false information to the viewers. They started having her on a few months ago when she said things were actually going up. Of course the National Association of Realtors are willing to provide data, they have skewed, to make things look more rosey than they really are. Today, she actually had the nerve to insist that only 1% of the loans in the entire nation are actually in the subprime sector. Wow! There are charts that clearly disprove this. She also claimed that this is not as bad as the the 1987 Crash. WHAT? First of all, Barabara, the crash began in 1991 and didn't hit bottom until 1996. NOT 1987. Any reputable real estate expert will know that. I don't think it was just here in California either, because it happened in other states too. I think it's time we all stop paying attention to what real estate "EXPERTS" say. They just have an agenda. Sell Houses.John S.https://www.blogger.com/profile/14326485645722286371noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-53640732579318214602007-09-25T11:19:00.000-07:002007-09-25T11:19:00.000-07:00@John,I don't think it will be as bad as some of u...@John,<BR/><BR/>I don't think it will be as bad as some of us predict. What will happen to raise our pessimistic predictions?<BR/><BR/>Boomer will put their house on market (J6P too can play the mark to market game). They'll find out that it will not be enough (deflationary or inflationary enviroment). Some will sell, but most will have to work pass 65.<BR/><BR/>Working pass "retirement" or 65 has become a stigma in our country. Why is this? I think this is a tragic view of working and retiring in general. I'm sure there are data out there to support this i.e.: people who enjoy their work, will tend to work much longer than those that don't. I suppose the point that I'm trying to make is that the key to happiness is not through retirement, but through productive and beneficial work to self and to his/her community. <BR/><BR/>That is my 2 cents.<BR/><BR/>PlanobclUnknownhttps://www.blogger.com/profile/03446839593212494581noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-38236381157599080752007-09-25T11:15:00.000-07:002007-09-25T11:15:00.000-07:00John:My opinion is that it's almost impossible to ...John:<BR/><BR/>My opinion is that it's almost impossible to estimate what the situation will be at that time. <BR/><BR/>With what the Fed and other central banks are doing, we may be entering a period of hyperinflation. If that's the case, then people with home equity and fixed incomes will almost be forced to sell or try to sell just to keep eating.<BR/><BR/>Even if this hyperinflation occurs, we have no idea how it will last. At the end of it will be a crash of some sort, likely generally deflationary. In that case, the retirees/fixed income people will want to hold on to their homes as at least a safe place to be. They may be wiped out on other assets.<BR/><BR/>Seems to be an extremely volatile and tricky environment, not even taking into consideration political upheavals, wars, commodity shortages and runaway socialist taxes that are surely coming. <BR/><BR/>Lastly, we gotta wonder how long the "social security" funds will hold out given our debt level and weak dollars...once the Chinese and Japanese dump the USD holdings. <BR/><BR/>I think one needs to be flexible and prepare for rapidly changing conditions.thamnosmahttps://www.blogger.com/profile/08857645872263236111noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-44728172839067874592007-09-25T10:50:00.001-07:002007-09-25T10:50:00.001-07:00Dr HB:I have a question for you and anyone else he...Dr HB:<BR/><BR/>I have a question for you and anyone else here:<BR/><BR/>Beginning in 2010, the baby boomer retirement wave begins in earnest (born in 1945 and they turn 65 in 2010). From 2010 and beyond, millions of baby boomers will start putting their homes on the market in order to fund their retirement.<BR/><BR/>What effect will this have on the housing market and has anyone done any research into this?Unknownhttps://www.blogger.com/profile/10152290334113995168noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-42801164763743938012007-09-25T10:50:00.000-07:002007-09-25T10:50:00.000-07:00CNN just had a bit on about the foreclosure capita...CNN just had a bit on about the foreclosure capital of the country - Stockton, CA - with a realtor showing a dump. Which wasn't really any better than a dumpster. Last owners trashed it before they left. So, sure, their dumpster had doors and a roof, but what's the difference?<BR/><BR/>The house had a mortgage that impovershed the "owners".Unknownhttps://www.blogger.com/profile/11815092488216012302noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-9046087203661406732007-09-25T10:29:00.000-07:002007-09-25T10:29:00.000-07:00Dr. HB:Maybe I read the graph wrong, but it appear...Dr. HB:<BR/><BR/>Maybe I read the graph wrong, but it appears to me the highest volume of resets will occur in the first 2Q of 2008 not the last Q of 2007 as you write in the column. Would you straighten me out on that?<BR/><BR/>Also...this article is just so on target<BR/><BR/>http://www.hyperinflation.net/essays/englund46.html<BR/><BR/>Here's a bit of it:<BR/><BR/>From Prime to Subprime, America’s Home-Mortgage Meltdown Has Just Begun<BR/><BR/>by Eric Englund<BR/><BR/><BR/>Inflation is an immoral tax that leads to immoral values<BR/>~ Anonymous South American banker<BR/><BR/><BR/>Having been in the credit profession for the past 23 years, I have observed several cycles involving the loosening and then the inevitable tightening of credit-underwriting standards. Of course, the Federal Reserve stands at the epicenter of such cycles. While money and credit are flowing like beer at an Irish pub on St. Patrick’s Day, everyone ends up looking like an attractive credit risk. When it appeared that the U.S. economy was heading into a recession, after the collapse of the dot.com and telecom bubbles, the Federal Reserve opened up the taps and encouraged one and all to imbibe its tasty, low-cost credit – with the most popular "flavor" being the mortgage loan. At this point, mortgage lenders merely became bartenders serving anyone who walked in the door. To reach this nadir in mortgage-lending standards, it is inescapable that the "Five Cs" of credit were ignored regardless if a mortgage loan was deemed prime, Alt-A, or subprime. This is exactly why the home-mortgage meltdown has just begun. <BR/><BR/>One aspect of my job entails analyzing personal financial statements. Twenty years ago, without a doubt, households had much healthier financial conditions. Back then, in proportion to household net worth, savings were much higher and debt levels (especially automobile, credit card, and mortgage debts) were dramatically lower. It is alarmingly common, today, to see households with well under ten thousand dollars in savings yet half-a-million dollars in mortgage debt – not to mention thousands of dollars in credit card debt and tens-of-thousands of dollars in automobile debt. Such households are literally one or two missed paychecks away from being destitute. Yet, amazingly, the heads of such households are considered to be prime-level borrowers (as long as there is adequate income to cover monthly debt service and expenses). What has happened, in the sphere of personal-credit underwriting, is that risk parameters have been redefined with the word "prime" having been defined downwards. <BR/><BR/>Credit Socialism<BR/><BR/>America’s unfolding mortgage-debt crisis did not emerge in a vacuum. When Alan Greenspan’s Federal Reserve pounded the federal funds rate down to 1%, in June of 2003, it is crucial to understand that such a low rate materialized due to the Fed’s aggressive creation of money and credit. In other words, America’s monetary central planner "knew" that massive inflation was needed to "rescue" the economy from the above-mentioned dot.com and telecom implosions. Housing was specifically targeted by the Federal Reserve to serve as "…a key channel of monetary policy transmission." With this colossal inflation of the money supply, I would argue that a hyperreality surfaced in the housing market – with corresponding bubbles emerging in consumer electronics and automobiles. During such episodes of heavy inflation, people tend to lose their sense of value including suspending any fear of debt. <BR/><BR/><BR/>The rest is so worth reading, including an explanation of the five "C"s of credit, which is somewhat what I had to contend with as a young adult home-seeker.<BR/><BR/>Regards and stay safe out there.thamnosmahttps://www.blogger.com/profile/08857645872263236111noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-8449679884887834132007-09-25T10:10:00.000-07:002007-09-25T10:10:00.000-07:00"staunch opponents of housing"That's me! I think ..."staunch opponents of housing"<BR/><BR/>That's me! I think everyone should live in a dumpster, dammit!W.C. Varoneshttps://www.blogger.com/profile/17663570682958847976noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-83909708047244775502007-09-25T10:05:00.000-07:002007-09-25T10:05:00.000-07:00Other forward looking indicators: restaurant sales...Other forward looking indicators: restaurant sales, retail sales, auto sales, and biofuels (commodoties) futures. Yep - the demand for biofuel has caused corn prices to record highs, and puts beef ranchers in direct competition with biofuel factories. Which means higher prices, which means inflation.<BR/><BR/>@Doc, you in the mortgage biz? I am, and it is funky weird out there. Lost a lot of realtor clients the last 4 years when I'd tell their buyers that neg loans were highly volatile - "don't blow my deal!" - and then no more referrals. What comes around goes around, I believe.<BR/><BR/>@Nathan - it seems a bit imprudent to buy zero down right now unless you truly have a 30 year timeline, based on the data that Dr HB et al present on the impending dip in prices, and how long it will take to recoup. There are jumbo 100% financing deals out there but the 2nd mortgage piece is NOT pretty, so you'd want to make sure your plan is to pay the thing off ASAP.<BR/><BR/>But that begs the question - why buy now?Unknownhttps://www.blogger.com/profile/11815092488216012302noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-80463634392765128842007-09-25T09:42:00.000-07:002007-09-25T09:42:00.000-07:00Another good article. One more thing. Groceries ...Another good article. One more thing. Groceries in Tucson are up 10% from a year ago according to the local newspaper. Gasoline is going to head up soon with crude oil around $80.00/bbl (you CA types love to drive the freeways!). Think there is going to be a big squeeze.oilwelldoctorhttps://www.blogger.com/profile/11007891744869739342noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-47371983824686256892007-09-25T09:41:00.000-07:002007-09-25T09:41:00.000-07:00@nathan,What was the loan amount and what rate wer...@nathan,<BR/><BR/>What was the loan amount and what rate were you given? Times are changing.Dr Housing Bubblehttps://www.blogger.com/profile/12407700951720008626noreply@blogger.comtag:blogger.com,1999:blog-35190061.post-73600352504807734692007-09-25T09:22:00.000-07:002007-09-25T09:22:00.000-07:00I just tried to get a loan through Country wide. ...I just tried to get a loan through Country wide. Make 300K household, stellar credit. Everything documented as you might expect.<BR/><BR/>Best Countrywide could do was 5% down. No zero down loans available. I have better options, but if I can't do it, then most can't. The days of 100% financing are likely a thing of the past.Unknownhttps://www.blogger.com/profile/00053834253262055212noreply@blogger.com