Housing Bubble Over, Transportation Fixed, Planners Resign, Blog to Close
Wow, that didn't take as long as I thought. Thanks. Yun, Paulson, Bernanke and Kudlow have all declared an end to the ginned up housing crisis scare. Their claims are unassailable. Recent declines represent nothing more than a reverse blow-off event with prices never to be seen again. Among the recent indicators they cited as causing this optimism are the end of the war in Iraq, the withdrawal of Hillary Clinton from the race and advance ticket sales for Elvis' comeback tour.
Roads have cleared, transit is paying for itself and the infrastructure deficit is being straightened out in ship shape Bristol Fashion. The Whitnall Freeway construction groundbreaking is imminent and the only arguments are whether the Purple Line subway go to the Promenade or the Courthouse in Santa Monica.
Carl Morehouse and Councilmember Fulton in a suprise joint declaration acknowledged the basic errors in planning for greater density and went so far as to admit global warming might not be the best idea they ever invented. The orderly transition will necessitate their resignations be delayed beyond April 1st.
PHILADELPHIA, March 28 (Reuters) - Authorities in Philadelphia will suspend foreclosure sales of homes whose owners have fallen behind on adjustable-rate subprime loan payments -- potential relief for tens of thousands of struggling debtors.
Sheriff John Green said he would halt sales of foreclosed properties in April and would seek a court order extending a moratorium for an unspecified period.
His action follows a nonbinding resolution passed unanimously by the Philadelphia City Council on Thursday calling on Green to stop the sales to give borrowers more time to seek a settlement that would prevent them from losing their homes.
Any bets as to how many thousands of homemoaners in Philly just stopped paying their mortgage upon hearing thjis news?
March 28 (Bloomberg) -- Billionaire Warren Buffett's new bond insurer may not get any business from California, the largest U.S. municipal debt issuer.
California Treasurer Bill Lockyer is leading more than a dozen state and local governments that say bond ratings exaggerate the risk of default, pushing up interest costs and forcing issuers to buy unneeded insurance. Lockyer said in a March 26 interview his state will shun Berkshire Hathaway Inc.'s venture because Buffett's company supports the current ratings.
``It's unfair to taxpayers,'' said Lockyer, who estimates the present system may cost his state an extra $5 billion over the next three decades. ``I hope Mr. Buffett will rethink that viewpoint. I don't intend to do any business with his firm.''
Can you believe this douchebag? Treasurer of a nation-state on the verge of insolvency and he thinks Warren Buffett is a poor judge of risk?
I lied it is only 1.0 giga-watts. As the American Century draws to a close the Pacific Century surges forward. Sharp invests $72M in Japan thin-film solar cell plant
Sharp has made a total capital investment of approximately $724 million to build a thin-film solar cell plant in Sakai, Osaka Prefecture, that is capable of annual production up to 1 gigawatt per year. With the annual production capacity on a 1 gigawatt scale, Applied Materials may be the supplier of the equipment.
Via Electronic News. The Dawg House is being evaluated for a 0.000004 giga-watt installation. This plant alone could provide for 250,000 per year. In three years this kind of plant by itself would meet the Million Solar Roofs goal years early.
One of the problems with massive ill considered development projects is the details. you know the little stuff the sales agent neglects to mention to the early buyers of $800,000 houses on postage stamp lots and $15,000 tax bills.
turns out last week ground was broken on one of those details.
Workers have already laid the foundations for 140 apartments and town homes in Oxnard's RiverPark development that will be home to more than 140 very-low and extremely-low-income families.
Now I knew this all along but apparently not the neighbors. Thay are a tad upset as seen in their comments:
I know what's in store... everything within a 2 mile radius being shot at, tagged, stolen or vandalized. Just wait until they, the new Paseo Del Rio's (PDRs), start fighting with the El Rio gangsters.
My tax dollars already provide these folks with free health care. They force many of the area schools to provide services for ESL instead of services that will prepare our most talented students for the next step in their education.
The [market] rent for a 1 bedroom is $1655.00/mo with garage. .... I would have been very angry if I leased then found out this news. I understand and have no problem with people who need some temporary help. The ones I worry about are the people who are using the system and cheat the system. I wouldn't like it if I am paying 4 times the rent these people are and have them ruin the place.
And to think I was gonna buy in that area, 550k for a beautiful townhome. What's the deal with this city? Allthese brand new communities are turning into low income social housing units. ...I would be absolutely fired up if I paid half a million dollars for my place, knowing my nieghbor is paying about $1000 for rent. And $270 for a one bedroom? My homeowners premium isnt even that cheap. Thanks Oxnard for once again ruining what could of been a clean, crime free community.
Even people not caught up in the mess are victims:
Because of the 'sweetheart deal' City Council made with the developers, I will watch Downtown Oxnard dry up and blow away.
The 2008 New American Home 6,725 square feet. The 2007 New American Home 5,283 square feet. The 2006 New American Home 10,023 square feet. The 2005 New American Home 5,950 square feet. The 2004 New American Home 5,172 square feet. The 2003 New American Home 3,000 square feet. The 1984 New American Home 1,500 square feet. New american Home website.
A former loan processor, Guerrero knows all about that, although so far she has been able keep her house. She used her tax refund to help pay many of her bills for the first two months, but now that money's gone. She says she's now in a middle-class "no-man's-land." "It just happened so fast. It happened in a matter of -- what -- two months," she said. She's eager to get back to work and to hold onto her home until the market turns. But for this single mom, every day it becomes harder to hang on.
Realtors out of commission Agents seek income elsewhere as their share of local home sales has plunged by $645 million in two years. By JEFF COLLINS The Orange County Register
Orange County real estate agents collectively earned about 13 percent less in commissions from home sales last year than the year before. And their income was down about 42 percent from 2005, shrinking by $645 million in the past two years.
That's a lot of multiplier lost in a local economy. Let's hear it for the hurting Realitter:
L.A. City Council rejects massive Las Lomas development In a split vote, the panel halts its review of the 5,553-home project near the 5 and 14 freeways. Some council members fear a lawsuit. By David Zahniser Los Angeles Times Staff Writer
1:11 PM PDT, March 20, 2008
A divided Los Angeles City Council voted Wednesday to halt its review of the 5,553-home Las Lomas project, dealing what could well be a fatal blow to the mega-development planned for north Los Angeles County.
"This project would have put 15,000 cars a day in an already heavily impacted area," said City Councilman Greig Smith, who represents the northwest San Fernando Valley. "The people of L.A. said we can't take that anymore. We're tired of it." ... The site, just north of where the Golden State Freeway intersects the 14, is in territory represented by Los Angeles County Supervisor Mike Antonovich, who opposed the project. Much of it borders Santa Clarita, which also had fought the project.
That left Los Angeles, where Smith introduced a proposal last month to stop all work on the project, partly to avoid wasting the Planning Department's time over the next two years.
The city of round heels grows a backbone or something else? Ans; a little of both.
First, this was the correct decision. There is just no way this sub-region could accommodate this project.
Second, the project obligates the region to a provision of basic services with massive upfront costs with increasing risk of no supporting revenues.
Third, given the players I fully expect the CA Supreme Court to hear at least some parts of this disagreement.
Finally, the belated hypocrisy factor.
The scorpion stings the frog because it is the scorpion's nature. both drown.
The problem is overpriced real estate and moribund ossified transaction mechanisms that are better suited to quill on parchment by candlelight at the county seat a day's horseback ride away than today. 10 years ago you could order online a replacement handle for the pot of your kitchen coffee maker at the same website as a diesel electric locomotive and F-18 jet engine (GE). There is so much turf protection and anti-consumer garbage built into the system that the perception that the market can be controlled has taken hold. The NAR is a laughing stock for trying to mislead the public. Mortgage broker and RE brokers alike are suffering real economic pain and garnering no sympathy. This is turning into more than a buyer's strike, it is on the verge of becoming a participants strike. At every end stage people are just saying no to price and terms and transaction costs. Lenders won't buy mortgage pools. Investors won't buy tranches or even straight debt. Home buyers won't take on debt.
There is not intervention that can change the imbalances that exist. The Fed doesn't like it. The banking system doesn't like it. Wall Street doesn't like it. Tough.
What more is there to say? Saved By Zero. Who knew that in addition to the 1930s Depression Uncle Ben was an aficionado of 1980s pop kulture.
WAMU is gonna be pissed when I max my HELOC @ 3% in a 12% inflation environment. Time to get serious about that solar array and maybe a Volt for the driveway. Update: Or a Tesla... Hat Tip Property Flopper.
I've gone through a spasm of buying some cheap entertainment recently. According to some I should be bunkering and stockpiling seed corn and bullets but other than outrageous prices there won't be rationing or bread lines so I'll just stay at home and watch DVDs at $0.35/kWh on the TV. Yes, 35¢ per kilowatt hour. Right now SCE Southern California Edison our monopolist State sponsored provider of electrons is charging something like 14¢ base but I have seen the future and it is expensive. As previously calculated here (EN, Aug 2006) it would take 40 new nuclear plants of the Diablo Canyon class to generate the energy equivalent of the gasoline we consume in California. Electrons are about to get real popular and the price is going to triple rather than new supplies being developed. This is the nasty consequence of dysfunctional intrusive liberal socialist government. In the name of environmentalism we get crippled economies, stunted technologies, rationing and you can bet; favoritism. Too late. The economy runs the agenda now. Nobody except the insane transportation planners in the big urban enclaves are going to be in any position to do anything resembling investment. Upside down homeholders who couldn't even save for a downpayment are not in any position to pay for rooftop solar and still afford to pay for gas. In the name of not increasing taxes you can bet tax credits are on the chopping block State and Federal as well.
Continued disinvestment is what got us here. More disinvestment won't get us out.
"Regards, walking away. There might be a greater national good in encouraging walking away. When borrowers are too far underwater their staying and repaying is going to be anti-consumptive. With 2/3rds of the economy consumer derived this may not be the most productive use of their efforts."
So, what about it? Making millions less mobile is going to hurt future job prospects and may consume more energy over time. It also stands to put a halt to any kinds of home improvement beyond the minimums, degrading the housing stock. There are more negative social outcomes that worry me but I'd like to hear your ideas.
Seeing as the Dawg House may be getting a 5kW photovoltaic installation two additional ideas rear up. Trapped homemoaners are not going to do this. Then again, maybe we can force them as part of the deal or just deed the solar rights to others or the power company.
Greg Swann quote from July 21st, 2006, 12:45 am MST:
We keep our own home sales price statistics, so we have no doubt that values are down from their high in December. How much? Right now, about 4%. Could they go lower? Certainly. Will they drop by the huge amounts HousingPanic and his flying monkeys seem to yearn for? This seems very unlikely.
What seems much more likely is that Phoenix will recover from the hangover of last year’s buying binge and get back to a steady rate of growth — historically 6% a year.
Here are Greg's statistics: Market Basket. Dec 2007 is 14.6% down y-o-y. July 2006 was last the time there was a y-o-y price increase. Coincidence? Hardly. Classic hubris.
And if you'd have listened to this paragon of the realty profession and bought, bought, bought? Jul 2006 $253,284. Dec 2007 $204,929. $2,850 per month in equity lost. Give it up Greg. The flying monkeys have won.
That didn't take long. A $200b infusion to save their banking buddies and all it cost was record low exchange rates, collapsed hedge funds, runaway inflation, and $110 oil. Stupid lending got us here. What insane economic theory says more insane lending will get us out?
he merry-go-round stands rusting and lifeless. An elaborate floral display that used to stand proudly at the front of the mansion has wilted, leaving just bare earth. The tepees are collapsing in on themselves and a tent covering the bumper cars is falling to bits.
Redfin has the details: 169 LA PATERA DR Camarillo, CA 93010 Price: $819,000 BEDS: 4 BATHS: 2 SQ. FT.: 2,000 $/SQ. FT.: $410 LOT SIZE: 1.49 Acres ON REDFIN: 270 days FIXER-UPPER NOT A SHORT PAY!! Great Las Posas cul-de-sac location and is a complete fixer upper but has wonderful potential and also includes a barn/storage building. Property is sold AS-IS with no repair or pest control work done. Owners motivated to sell!!! NOT A SHORT PAY!!! -2 additional, contiguous, 1+ acre parcels also for sale (MLS 8000219) for $899,000 ---- What? no pics of this $820k estate? No problem. I've got some. A little peeling paint, a little structural rot. They did say fixer.
A little settling, a little foundation work. They did say fixer.
No plumbing and it doesn't take a rocket scientist to know the septic has completely failed either.
So, bottom line; this is worse than buying raw land with one exception. you have existing rights to a house and septic and such.
This is the point where Lou chimes in with expansive descriptions of what $820k gets you in suburban Austin.
We'll watch this one to see if some enterprising contractor can turn a deal or whether I pick it up at the tax auction in 2011. My bet is a contractor pays $620k and does a "Santa Monica Remodel" that sits on the market unloved at $1.1m summer 2009.
Pardon the oblique homophobia that might be incorrectly read into my title. Knob gobbling or rug munching has nothing to do with why I am so pissed. I am a bit perturbed that his appetites have actually protected him from any critical scrutiny of his political follies.
What has this bungler done this time to earn my ire?
The Case for a Housing Rescue By Barney Frank Washington PostSunday, March 9, 2008; Page B07
Problems that began in the U.S. mortgage markets Idiot. They only manifested in the mortgage markets first. have led to the most serious international economic crisis since the late 1990s. You know before Bush. Classic politcal positioning and time shifting. Huge losses and concern about credit quality have spread far beyond the housing sector. America faces the prospect of a sharp recession, made all the likelier by the probable default of several million additional mortgages in the coming year and the resulting displacement of millions of families. Families. Gee is anyone here thinking Barney Frank is a likely flag bearer for the traditionally Republican right conservative religious topic? To avert a recession, Hubris writ large. or at least diminish its severity, Congress and President Bush recently collaborated to pass an economic stimulus package, and the Federal Reserve has lowered interest rates. But the unusual nature of the problems means that these measures, while necessary, are not sufficient. Determining what must be added to the policy mix requires understanding how this economic crisis is different from all others. The deterioration of credit and underwriting standards that went unchecked by regulators has weakened many financial institutions and made all of them reluctant to provide the flow of credit that is necessary to fuel economic growth. Is he saying he will resign in disgrace having failed in his job? Not.
The negative consequence of this cascade of foreclosures has turned out to be more damaging than predicted. Hoocoodanode? Of course, individuals whose homes are foreclosed suffer the most, Huh? Do Casey's victims think this? Even Casey no longer thinks this and he's stupider than Barney. and in some cases it is a suffering to which their own irresponsibility contributed. If they were the only ones being hurt, the arguments for simply letting things take their course without intervention would be stronger. This is a subtle point, worthy of a repeat elected politico. He cannot say it because it isn't true but Frank makes it clear by implication that people not involved are being hurt. But there are concentric circles of victims... Yadda, yadda. You can read the reast and fill in my obvious replies.
The writer, a Democrat from Massachusetts, is chairman of the House Financial Services Committee. Got that? The parent killer is an orphan and doesn't understand why.
I'm not sure and don't see any need to invade privacy to find out but this "compound" pretty much speaks to what the owner might have done to earn their millions. Something like 9 months on market. Redfin has a listing. Talk about a Toyland. Just look at the Toy Barn. And that wasn't enough so they have an extra enclosure right beside. Camarillo, CA 93012 Price: $3,599,000 BEDS: 6 BATHS: 7 SQ. FT.: 6,400 $/SQ. FT.: $562 LOT SIZE: 11.23 Acres
anybody with $3.6m to spend is not going to want somebody else's idea of a Dallas meets Tara.
Recently purchased/viewed DVDs: Heathers - great acting, dark comedy, smart plot and dialog American Werewolf In London - Hello David! Koyaanisqatsi - if you have to ask... 12 Monkeys - I'm not sure if this is anti-technology or anti-environmentalism Top Cat animated series - politically incorrect cultural slice Dead Like Me complete series - what can you say about a program that spent hundreds on every episode and it shows The Iron Giant - The Day the Earth Stood Still for kids or is it?
I've interspersed commentary in this LATimes article: Schwarzenegger puts tax loopholes on the table George Skelton- Capitol Journal - March 6, 2008
SACRAMENTO — Give him credit: Gov. Arnold Schwarzenegger is the first Republican in California's Capitol to begin taking off the budget blinders.
Scurrilous lies of the highest order. dozens of Republicans were screaming that the budget was unbalanced when it counted during the last round of spending increases and rosy revenue projections. Many refused to even vote for this budget.
He's actually advocating tax increases, give or take some semantics.
Classic liberal bias. Gracious in providing a fig leaf as long as there are tax increases.
True, many conservatives -- professional politicians and party activists -- don't consider Schwarzenegger a real Republican. Politically, he's neither fish nor fowl. In fact, conservatives see him as a RINO -- Republican In Name Only.
Unlike the socialist liberals that control State government some people judge their elected representatives on their results not their rhetoric or good intentions.
But Schwarzenegger is the only Republican to win a top-of-the-ticket office in California since 1994. He won 91% of the GOP vote in his 2006 reelection, based on a Times exit poll. He's the state's most popular politician, enjoying a job approval rating (60%) even higher than Democratic U.S. Sen. Dianne Feinstein's (50%), based on the latest Field Poll. So he's basically in sync with California voters, especially Republicans.
Notice how there is no recent polling being mentioned.
The governor now apparently is willing to spend some of his popularity in an effort to straighten out the state's budget mess. He understands, advisors say, that by pushing for tax increases -- even if he calls them loophole closings -- his popularity is very likely to fall.
Gee, and when it does the LATimes looks visionary for having predicted what we already know.
And, face it, Schwarzenegger did win reelection by promising not to raise taxes and by pummeling his Democratic opponent, Phil Angelides, as a tax-and-spender. So he'll need to perform some flip-flopping acrobatics.
The governor's goal in recent days, advisors say, has been to kick-start negotiations over the final $8-billion plug for the state's budget hole. The deficit projection for the current and next fiscal years had been $16 billion. But the Legislature and governor halved that amount last month with some emergency cuts, borrowing and accounting tricks.
Of which about $4 billion is likely to be restored by court challenges. Still, the $16 billion is a "current account deficit." That means it doesn't include the $4b or so accidentally carried over from last year nor does it come even close to addressing the two real problems. No matter how you slice it California is going to get a combined $96b in revenues from all sources and is going to spend $123b on all expenses. Taking on an additional $100 per person in debt doesn't fix that.
Last week, Schwarzenegger decided to step across his no-tax line in the sand in order to point the way toward compromise with Democrats.
Compromise? The Democrats (well, liberals but that's another story) want more taxes. How is more taxes in any way a compromise?
Flying to Los Angeles aboard his private jet, aides expressed a sense of urgency to him. The governor mentioned that there was a lot of revenue to be gleaned from closing tax loopholes. A few days earlier, Legislative Analyst Elizabeth G. Hill had recommended closing or narrowing a dozen loopholes and generating $2.7 billion a year.
Hill cited home mortgage interest deductions explicitly as one of those loopholes.
It was clear to Schwarzenegger that, for political and practical reasons, the deficit hole could not be filled with spending cuts alone. He decided to support loophole closings. But advisors were surprised when the governor spontaneously popped out with the idea the next morning during an audience Q&A after addressing Town Hall Los Angeles.
"I'm a big believer," he said, "that when we have a financial crisis like this that we all should chip in. And this is why I totally agree with the legislative analyst's office when she says that we should look at tax loopholes. . . .
"I think that we should go after those tax loopholes because we would need the extra $2.5 billion. This is $2.5 billion we can give straight to education. I am totally for that . . . because everyone has to give something."
The battle is already lost. Everybody "giving" something? You mean like getting the CHP and Prison guards to give back pay raises and retirement benefits? That kind of give? No, not that kind of give.
Outside, talking to reporters, Schwarzenegger backed off slightly, but not substantively. "I'm not for the recommendations [Hill] made, necessarily," he said. "I just think that Democrats and Republicans should work together on this." The idea, he said, is to "close some of those tax loopholes."
Republican lawmakers consider closing loopholes the same as raising taxes. And they're right, of course. Loopholes are plugged to increase tax revenue. That fact can't be disguised with spin words like "loopholes" or "tax expenditures."
We don't tax home mortgage interest. The Legislature wants to start taxing home mortgage interest. How do these people sleep at night?
On Tuesday, Schwarzenegger told reporters that lawmakers shouldn't get hung up on semantics.
"We should not get caught up in what something is called," he said. "That doesn't bring anyone any healthcare. It doesn't bring any education. . . . What we need to do is fix problems. Let's just put everything on the table and not debate over the definitions."
Notice again how "everything on the table" omits spending cuts.
Democratic leaders should consider it an invitation to offer Schwarzenegger a tax proposal. The governor finally agrees with them, it seems, that the state does have a revenue problem -- not simply a spending problem.
But Democrats are splintered.
Senate President Pro Tem Don Perata (D-Oakland) wants to fashion a budget proposal through the traditional legislative process, with public hearings, and avoid closed-door negotiations between leaders and the governor. That's fine. But this is ominous: He's vowing "the fight of a lifetime," threatening to block budget passage all summer if necessary to protect school funding, insisting loophole-closing isn't enough and talking up a sales tax increase.
Two years ago I was paying 14.5¢ per gallon sales tax on gasoline. Now I am paying 25¢ per gallon. There are districts where people are paying 8.25% sales tax on just about everything. Does the phrase blood from a stone mean anything to these people?
Assembly Speaker Fabian Nuñez (D-Los Angeles) is more attuned to Schwarzenegger.
"If other Democrats want to beat up the governor, I respect their views," he says. "But I think the governor is a good man and doesn't want to make cuts any more than I do. Now it's up to us to show him a road map to a balanced budget."
Comments like this get absolutely no critical examination by the MSM. They don't want to make cuts? Fine, i don't want to pay more taxes so there, it is off the table.
Nuñez isn't ready to support a general tax increase, like on sales. That should be a "last resort," he says. For now, he advocates closing business loopholes. For example, he'd impose an oil severance tax -- California is the only state without one, he says -- and raise $1 billion.
But the speaker opposes Hill's biggest recommendation: dramatically reducing the dependent income tax credit and gaining $1.3 billion. "That hits working-class families."
Oh what the heck, let's just sign over our Federal stimulus checks to Sacramento.
Republicans still oppose a tax hike by any definition.
Do they really think that the general fund budget -- currently at $103 billion -- can be balanced with only spending cuts? "That's our goal," says Senate GOP Leader Dick Ackerman of Irvine.
"Is it going to happen? I can't tell you that."
A slight waver? Maybe he's peeking outside the budget blinders.
Sometimes it is more important to know what people are listening to rather than waste time listening to them. Examples of books I've read recently. Probly no insights but it might motivate suggestions. West of Eden - Harry Harrison Ten Thousand Light-Years from Home - James Tiptree, Jr. the explorers - C. M. Kornbluth A Choice of Destinies - Melissa Scott Starships - Asimov, Greenberg, et al Fallen Angel - Niven, Pournelle, Flynn Overlooked In America - Ketchum
Counties that get the $729,750 maximum for FHA loans are likely to get that same level for Fannie and Freddie mortgages, experts said. HUD is expected to designate new Freddie and Fannie limits for other parts of the country too.
In California, the counties at the maximum level for FHA loans are Alameda, Contra Costa, Los Angeles, Marin, Monterey, Napa, Orange, San Benito, San Francisco, San Mateo, Santa Barbara, Santa Clara, Santa Cruz and Ventura. At the other end, Lassen, Modoc and Trinity counties are subject to a loan cap of $271,050 -- a standard amount in an area with normal home prices.
Won't that be just peachy. All those $700k loans causing so much trouble for banks and investors can now get dumped into the taxpayers' lap via FHA, Fannie and Freddie. And what does $700k get you in bucolic Ventura County? maybe you'd be interested in this:
Sweet Camarillo bungalow 1,662 Sq. Ft. only $679,900. Good to know your nation invests in only the best. Oh, and don't forget, while some lucky homeowner kicks back in thissartorial castle three families in non-bubble areas go without getting mortgages as the money is all in this one beauty.
Perhaps something a little newer. This honey is what happens when planner social engineering and developer greed mesh:
Built in 2006 this 5 Bed, 3 Bath 2,851 Sq. Ft. is a modern classic in the Neo-Traditional style. What is NeoTrad? In this case it means a 2,851 sf house on a 4,347 sf lot.
Housing Bubble, credit bubble, public planning, land use, zoning and transportation in the exurban environment. Specific criticism of smart growth, neotradtional, forms based, new urbanism and other top down planner schemes to increase urban extent and density. Ventura County, California specific examples.