Comments on: The Abyss is Deep: The Housing Abyss is Deep: 4 Major Reasons Why Housing in Southern California is Nowhere Near a Bottom. http://www.doctorhousingbubble.com/the-abyss-is-deep-the-housing-abyss-is-deep-4-major-reasons-why-housing-in-southern-california-is-nowhere-near-a-bottom/ How I Learned to Love Southern California and Forget the Housing Bubble Fri, 09 Jan 2009 13:37:47 +0000 http://wordpress.org/?v=2.2.2 By: vjmalin http://www.doctorhousingbubble.com/the-abyss-is-deep-the-housing-abyss-is-deep-4-major-reasons-why-housing-in-southern-california-is-nowhere-near-a-bottom/#comment-11230 vjmalin Thu, 17 Apr 2008 00:13:33 +0000 http://www.doctorhousingbubble.com/the-abyss-is-deep-the-housing-abyss-is-deep-4-major-reasons-why-housing-in-southern-california-is-nowhere-near-a-bottom/#comment-11230 My mini-ranch sold for 860,000 to a friend in 2006, then he backed out of the deal. I Put it up for sale again as I was poring money into it so I could make it a million dollar house as I listen to all the Realtors that wanted to list it on the market.. Was offered 900,000 for it from another friend and went through another 5months for the sale to go through. Then they backed out and couldn't buy it. I put it up for sale again and then lost the market. The money I put into the house of over $70.000 I have lost along with all the payments each month. So we had to stop paying on our loan seven months ago. We are trying to sale our house by short pay. So in 2006 I almost had a sale of $900,000 dollars offer down to $499.000 dollars in 2008. My loan on the house is now over $840.000 . I'm just hoping our new offer of $499,000 the bank well take and not come after us for the difference. This makes me sick just to think about it. My mini-ranch sold for 860,000 to a friend in 2006, then he backed out of the deal. I Put it up for sale again as I was poring money into it so I could make it a million dollar house as I listen to all the Realtors that wanted to list it on the market.. Was offered 900,000 for it from another friend and went through another 5months for the sale to go through. Then they backed out and couldn’t buy it. I put it up for sale again and then lost the market. The money I put into the house of over $70.000 I have lost along with all the payments each month. So we had to stop paying on our loan seven months ago. We are trying to sale our house by short pay. So in 2006 I almost had a sale of $900,000 dollars offer down to $499.000 dollars in 2008. My loan on the house is now over $840.000 . I’m just hoping our new offer of $499,000 the bank well take and not come after us for the difference. This makes me sick just to think about it.

]]> By: Billy Jones http://www.doctorhousingbubble.com/the-abyss-is-deep-the-housing-abyss-is-deep-4-major-reasons-why-housing-in-southern-california-is-nowhere-near-a-bottom/#comment-10609 Billy Jones Fri, 11 Apr 2008 03:11:26 +0000 http://www.doctorhousingbubble.com/the-abyss-is-deep-the-housing-abyss-is-deep-4-major-reasons-why-housing-in-southern-california-is-nowhere-near-a-bottom/#comment-10609 This is all amazing!! When will it end? 10 years from now, 20? This is all amazing!! When will it end? 10 years from now, 20?

]]> By: Reena http://www.doctorhousingbubble.com/the-abyss-is-deep-the-housing-abyss-is-deep-4-major-reasons-why-housing-in-southern-california-is-nowhere-near-a-bottom/#comment-10545 Reena Thu, 10 Apr 2008 00:07:16 +0000 http://www.doctorhousingbubble.com/the-abyss-is-deep-the-housing-abyss-is-deep-4-major-reasons-why-housing-in-southern-california-is-nowhere-near-a-bottom/#comment-10545 Everyday we hear that yet another Retailer has laid off people. Yesterday it was 20 employees at the local lumber supply store. What is frustrating is that we do not get the "real" numbers on unemployment right now. By the time these people actually receive unemployment and the numbers are recorded another 6 to 8 weeks will have gone by. We are still dealing with the data as of the last quarter of 2007. And those numbers are deceiving because alot of Retailer add employees over the holidays to deal with the expected holiday season. Come January 1st these people get laid off. And the data isn't actually apparent until almost February. What is going on right now is really scary. It isn't just the jobs lost that are related to the Real Estate Market but goes way deeper. Now it affects all classes of Retail and manufacturing. We simply no longer have the sales that are considered "normal". The price of gasoline is sky high. The refineries are cutting back production because they can't make the margin... in other words it is not profitable enough to produce a high inventory of gasoline right now, so let's just cut back and charge an arm and a leg to the gas stations which in turn have to keep raising the price of gas so they hopefully can pay for the next tanker load that is scheduled to arrive. At the same time the Credit Card Fees that are charged to the merchants is eating up the profits. When monthly credit card fees are reaching the same level as your monthly payroll you are getting very tempted to switch to cash only. But in this day and age over 80% of your business is done in Credit Cards. The spread between Debit Transactions and Credit Transactions is 4 to 1 in favor of credit. That alone tells you that we Americans have a problem. It used to be that you would think twice to swipe your credit card to buy a cup of coffee or a snack. Not anymore... The price for a barrell of oil keeps going up and up. I just wonder whether the fact that a very important person in Abu Dhabi just put 7.2 billion dollars into Citicorp (MasterCard), so that his recent investment wouldn't go belly up, has something to do with it... After all Abu Dhabi is one of the top oil producers... I am sure that his "Highness" isn't too upset that the barrell price keeps going up and up. The SOB is probably pushing it up there himself to get his money back. Yes, everything is interconnected and no, the Real Estate Market has not found it's bottom yet. Wishfull thinking and blatant lies about the state of the Economy and the future will not change the hard facts. Jobs are being lost, wages are not keeping up with inflation and the average American carries such a high balance of credit card debt that there isn't enough money left anymore after you pay fo gas. Everyday we hear that yet another Retailer has laid off people.
Yesterday it was 20 employees at the local lumber supply store.
What is frustrating is that we do not get the “real” numbers on
unemployment right now. By the time these people actually receive
unemployment and the numbers are recorded another 6 to 8 weeks
will have gone by. We are still dealing with the data as of the
last quarter of 2007. And those numbers are deceiving because
alot of Retailer add employees over the holidays to deal with the
expected holiday season. Come January 1st these people get laid off.
And the data isn’t actually apparent until almost February.
What is going on right now is really scary.

It isn’t just the jobs lost that are related to the Real Estate Market
but goes way deeper. Now it affects all classes of Retail and
manufacturing. We simply no longer have the sales that are considered
“normal”.

The price of gasoline is sky high.
The refineries are cutting back production because they can’t make
the margin… in other words it is not profitable enough to produce
a high inventory of gasoline right now, so let’s just cut back and
charge an arm and a leg to the gas stations which in turn have
to keep raising the price of gas so they hopefully can pay for the
next tanker load that is scheduled to arrive.
At the same time the Credit Card Fees that are charged to the
merchants is eating up the profits. When monthly credit card fees
are reaching the same level as your monthly payroll you are getting
very tempted to switch to cash only.

But in this day and age over 80% of your business is done in Credit Cards.
The spread between Debit Transactions and Credit Transactions is
4 to 1 in favor of credit. That alone tells you that we Americans have a
problem. It used to be that you would think twice to swipe your credit card
to buy a cup of coffee or a snack. Not anymore…

The price for a barrell of oil keeps going up and up.

I just wonder whether the fact that a very important person in Abu Dhabi
just put 7.2 billion dollars into Citicorp (MasterCard), so that his recent
investment wouldn’t go belly up, has something to do with it…
After all Abu Dhabi is one of the top oil producers…
I am sure that his “Highness” isn’t too upset that the barrell price
keeps going up and up. The SOB is probably pushing it up there
himself to get his money back.

Yes, everything is interconnected and no, the Real Estate Market
has not found it’s bottom yet.
Wishfull thinking and blatant lies about the state of the Economy
and the future will not change the hard facts.
Jobs are being lost, wages are not keeping up with inflation and
the average American carries such a high balance of credit card debt
that there isn’t enough money left anymore after you pay fo gas.

]]> By: A. Zarkov http://www.doctorhousingbubble.com/the-abyss-is-deep-the-housing-abyss-is-deep-4-major-reasons-why-housing-in-southern-california-is-nowhere-near-a-bottom/#comment-10493 A. Zarkov Wed, 09 Apr 2008 04:46:16 +0000 http://www.doctorhousingbubble.com/the-abyss-is-deep-the-housing-abyss-is-deep-4-major-reasons-why-housing-in-southern-california-is-nowhere-near-a-bottom/#comment-10493 In the early 1990s I saw over priced properties in Orinda (Northern California, East Bay) languish on the market for years. One vacant house sat there for over 4 years unsold. One owner pulled his place off the market , put in a new retaining wall, then relisted it for $100k more. Now he had a more expensive house that wouldn't sell. I saw the same thing happen in the Oakland Hills. Absolute junk listed for breathtaking prices that just stood empty. I offered to rent one, but the owner declined even though he kept dropping the price and changing listing agents for years. This experience taught me a valuable lesson on just how irrational some sellers can be. I think this downturn will be more severe and I'm curious to see just how long they will hold out. In the early 1990s I saw over priced properties in Orinda (Northern California, East Bay) languish on the market for years. One vacant house sat there for over 4 years unsold. One owner pulled his place off the market , put in a new retaining wall, then relisted it for $100k more. Now he had a more expensive house that wouldn’t sell. I saw the same thing happen in the Oakland Hills. Absolute junk listed for breathtaking prices that just stood empty. I offered to rent one, but the owner declined even though he kept dropping the price and changing listing agents for years. This experience taught me a valuable lesson on just how irrational some sellers can be. I think this downturn will be more severe and I’m curious to see just how long they will hold out.

]]> By: Scott http://www.doctorhousingbubble.com/the-abyss-is-deep-the-housing-abyss-is-deep-4-major-reasons-why-housing-in-southern-california-is-nowhere-near-a-bottom/#comment-10483 Scott Tue, 08 Apr 2008 21:18:34 +0000 http://www.doctorhousingbubble.com/the-abyss-is-deep-the-housing-abyss-is-deep-4-major-reasons-why-housing-in-southern-california-is-nowhere-near-a-bottom/#comment-10483 The securitization of non conforming loans is finished, kaput, dead. That takes a huge chunk of money for the real estate market off the table. It was only the ability of some slick hucksters to take this junk and pawn it off to investors that this thing got as far as it did but don't expect UBS or BNP Paribas or any other foreign bank, hedge fund or sentient foreign investor to be willing to put their money in any US property derivatives for long long time. To the extent that US banks have been hurt, and they have, that too will limit their ability to finance future mortgages. Read the stories about WAMU in the financial press today. Even with a $7billion dollar cash injection it is going to have to shrink its loan activity. That's what bad loans do to banks and not even the Fed and the GSE's can recapitalize banks. So the money is just not there to sustain today's housing prices at anything like recent sales volumes. Between finding qualified buyers able to pass GSE muster and the ability of banks themselves to come up with the cash to lend getting rid of the housing overhang of both new and existing homes is going to take years not months. The securitization of non conforming loans is finished, kaput, dead. That takes a huge chunk of money for the real estate market off the table. It was only the ability of some slick hucksters to take this junk and pawn it off to investors that this thing got as far as it did but don’t expect UBS or BNP Paribas or any other foreign bank, hedge fund or sentient foreign investor to be willing to put their money in any US property derivatives for long long time. To the extent that US banks have been hurt, and they have, that too will limit their ability to finance future mortgages. Read the stories about WAMU in the financial press today. Even with a $7billion dollar cash injection it is going to have to shrink its loan activity. That’s what bad loans do to banks and not even the Fed and the GSE’s can recapitalize banks. So the money is just not there to sustain today’s housing
prices at anything like recent sales volumes. Between finding qualified buyers able to pass GSE muster and the ability of banks themselves to come up with the cash to lend getting rid of the housing overhang of both new and existing homes is going to take years not months.

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