Tuesday, October 24, 2006

New Poll:OC Housing to Tank in 2007

Thank you to John Lansner of the Orange County Register for bringing to light what many in the southern California real estate establishment were too cocky (and to afraid) to admit.

What can we learn from this poll? Well, the housing market sentiment in Orange County is shitty. Really shitty. And it's only going to get shittier and shittier.

Hell, I live here and I considered myself somewhat bullish by voting into the 35th percent column!

As of October 24, 2006 here are some of the poll results:

Which way will O.C. home prices go in 2007?

1 % Up dramatically (10%+)

12% Up a bit (2-10%)

10% Essentially flat (-2% to 2%)

35% Down a bit (-2% to -10%)

42 % Down dramatically (-10% or more)

The sky is falling. The sky is falling. Falling is the sky.

Friday, October 13, 2006

OC Real Estate Agents Getting Creative

- Free Barbecue at Open Houses

- Cute High School Cheerleaders Delivering Home Flyers

- Mexican Mariachi Bands

- Free Moving Trucks

- Paying Closing Costs and Homeowner Association Dues

- $5000 Cash To Find Home Buyers

These are some of the new creative incentives being offered by Orange County California realtors to the public in order to drum up interest in the over-priced, $500,000 plus stucco shitbox homes in the area.

Orange County real estate agents, who have grown rich and fat over the last 5 to 10 years by overhyping the financial infallibility of the local housing market and earning 6% commissions on the sale of six figure homes, are finally discovering what it feels like to actually put in a full days work, even if they remain corrupt and overtly duplicitous while doing so.

Let's hope for their sake that home sales pick up.

Thursday, October 5, 2006

Mark Your Calendars: Housing Crash in 2007

Are housing price slashes on the new year horizon? Moody's recent report seems to think so.

Fed Chairman Ben Bernanke says "Look out below!"

Benny say dat home prices is going down-town....

Wednesday, October 4, 2006

Federal Govt Clamp Down Too Late

Do you know anyone who keeps making the same mistake over and over?
They apologize and say how very sorry they are, but then shortly afterward do the same damn thing again?

Now consider the United States banking and mortgage lending industry. In the mid to late 1980s hundreds of savings and loan banks throughout the country went out of business and were eventually bailed out by the U.S. government (in other words bailed out by U.S. taxpayers!) for making shady loans to unqualified, poor credit rated customers.

Around 1999 began a never-before-seen period of fantastic appreciation rates in housing nationwide. Incomes were quickly outpaced by the rate of appreciation. In order for new home buyers to afford the high market value of homes, lending institutions found creative loan instruments to help people stretch their budgets, dive in comfortably into homeownership. Buy now, pay later and watch your "investment" grow!

So here we find ourselves in 2006 facing a similar situation. Many people who bought their homes in 1999 or 2000 using these "creative" interest-only or adjustable rate mortgages, face the impossibility of meeting increased monthly home payments as a result of the rate adjustments.

Only now is the Federal Government issuing to banks tighter guidelines to instruct borrowers of the high risks of using such loans, and forcing banks to follow strict criteria in order for customers to even qualify for such loans.

As usual, such government regulation of the lending industry may be too late. The housing market is now crashing and burning in many areas of the United States. Tens of thousands of Americans may be facing foreclosure or financial ruin as a result of their financial ignorance and "pie in the sky" optimism for real estate.

Once again, we will hear senate and congressional hearings on Fox, CNN and the national networks to determine what went wrong, why and by whom. In a market-based capitalist society and economy, the laissez-faire approach certainly has its merits. But as proven time and time again, the money lending industry, and now members of the real estate sales community - have proven that they cannot be trusted. They have implemented business strategies with fail-safe tactics. When the foreclosures come and the bank fails, the U.S. taxpayer will help us pick up the pieces.

The U.S. government must shield itself from the powers of politics and special interest groups and start over to regulate the banking and real estate sales communities to higher and more strict standards.

Now, with that said, take your hands of the mousepad. Everyone take you our wallets out and prepare yourself mentally to foot the bill for these financially inept morons...

48% of Californians In Over Their Heads For Home Ownership

Check this out. 48% of Californians are stretching their budget just to call themselves homeowners, dedicating more than 30% of their annual income on housing which is too much by any standard, let alone federal government recommendations.

But hey, it's a free country. Do what you want! Just don't bring the rest of us down with you, OK?

Uh-Oh! Future Home Values in O.C. to Fall 10%?

Holy crap! This is not good news, but it's worth reading. Definitely not a local issue, but a national one.

Why in the world would home values in lovely Orange County fall by as much as 10% in 2007? That would mean that, for example, a Lake Forest, California home valued today at $685,000 (not unreasonable, just check out homes listed under ZipRealty.com) could potentially stumble to as low as $616,000!

One reason why this may occur is because housing speculators, or "flippers" are getting the hell out of the market while they can, selling off the homes and condos they purchased in order to salvage a make a small profit, at least break-even or not lose their financial ass completely.

Check out OCFlipTrack's website and you'll see exactly what I mean.

Oh, what a tangled web we weave!

In fact, the desperation of these housing investors, facing impending financial ruin should they hold on to these "assets", I mean liabilities, while they decline in value, is leading many to slash sale prices aggressively each week, creating greater pressure on all sellers in an area to lower their own sale prices to attract buyers. Despite these efforts to cut prices and unload half-million dollar property investments, buyers in Orange County remain cautious, reluctant to make any moves just yet, as evidenced by increased inventories in single family homes and condominimums in the area in September.

Tuesday, October 3, 2006

California Home Foreclosures Increasing

Foreclosures up nationally 50% year on year and up 24% between July and August 2006.

"Gee honey, I thought you said we could afford this $650,000 house....

and the Ford Mustang convertible,

and the boat,

and the new leather furniture,

and the camper,

and the remodeled kitchen.... "