Stupid Girl — Pink
Yesterday’s post stirred up quite a controversy, and today’s probably will as well. It is politically incorrect and full of stereotypes that will make many cringe. There is a reason we have those politically incorrect stereotypes — they describe large groups of real people who exhibit stereotypical traits and behaviors. The Political Correctness crowd may not like it, and they may pressure people from expressing these stereotypes (at least to the degree that people fear the vengeful wrath of the PC police.) However, if people fit a profile, then there must be some validity to it.
One of the unique characteristics of the Great Housing Bubble was the large increase in market participation among women — sometimes single women and sometimes as married women buying property on their own. Some amount of this is to be expected as single women establish careers and put off marriage. In the past, most single women rented as did most men in their 20s. Men would often buy a house even if they were single. I suspect many viewed this as proof of their ability to be a provider and to attract a mate (I know I did.) Women more often would not buy a home when they were single. I suspect many did not because they knew they would have to deal with two houses when they got married, and the property would be a hindrance. Also, when you look at consumer demographics and personal savings, single women have not historically been big savers. Sure there are always some who are responsible from a young age, but many single women prefer to run up big credit card bills obtaining the latest fashion trends than worry about saving money (and yes, single men spend a lot on beer too.) The trend toward married women buying property as “her sole and separate property” was also a new phenomenon.
So what changed during the Great Housing Bubble? First, since saving was eliminated as a condition of ownership, many single women decided to buy and have a home of their own. Rather than a property being a hindrance, it became a great speculative asset that provided huge amounts of extra spending money. Several of the properties I have profiled with excessive HELOC abuse have been solely owned by women (not that men were any more responsible.) With the large number of women working as mortgage brokers and
realtors, it is likely that many of the purchases by married women as their sole and separate property were by those in
the business. It was all part of making a living.
Why did I pick the song Stupid Girl? Well, these purchases did not turn out to well for many. Was it stupid? I guess if you got to “live large” in your 20s from the HELOC on your house, perhaps not. The memories are great, and you still have time to recover financially. For the older singles and married women who speculated in the real estate market, there will be more serious ramifications. I don’t think anyone is going to label these purchases as a work of genius. Today’s featured property was purchased by a married woman as her sole and separate property, and now, after the foreclosure she has bad credit. Do you think this has impacted the family? It can’t be a plus.
Asking Price: $559,000
Income Requirement: $139,750
Downpayment Needed: $111,800
Monthly Equity Burn: $4,658
Purchase Price: $689,000
Purchase Date: 11/15/2006
Address: 33 Castillo, Irvine, CA 92620
| Beds: | 3 |
| Baths: | 3 |
| Sq. Ft.: | 1,896 |
| $/Sq. Ft.: | $295 |
| Lot Size: | 3,420
Sq. Ft. |
| Property Type: | Single Family Residence |
| Style: | Other |
| Year Built: | 1977 |
| Stories: | 3+ Levels |
| Area: | Northwood |
| County: | Orange |
| MLS#: | S525706 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 138 days |
 Unsold in 90+ days
|
|
family room and kitchen. Great community & schools. Low
association.
The lender has been lowering price to move this one.
Listing Price History
| Date | Price |
| Mar 19, 2008 | $649,900 |
| May 05, 2008 | $609,900 |
| Jun 02, 2008 | $594,900 |
| Jul 24, 2008 | $559,000 |
This property was purchased on 11/15/2006 for $689,000. The buyer, a $551,200 first mortgage, a $137,800 second mortgage and a $0 downpayment. It went back to the bank for $560,000 on 11/14/2007, almost a year to the day. I usually smell fraud when I see them go back this quick. People will make the first two payments to get around being prosecuted for fraud, then stop payment and let it go back to the lender. The one-year timeline is just about right given the amount of time a foreclosure takes. If this had been purchased as a speculative flip (we should give the benefit of the doubt,) then this woman is really stupid. Or perhaps we should view her as a hapless victim of the unpredictable housing market? That might be an easier sell if there weren’t many people already predicting a crash by then.
If this property sells for its asking price, the total loss to the lender will be $163,540 after a 6% commission. Personally, I think this property is ugly inside and out, but then again I will not be buying for a couple more years, so my opinion doesn’t matter much right now. Perhaps someone will step up and pay that much, or perhaps they will keep renting and save their money. That wouldn’t be stupid…
.
Stupid girl, stupid girls, stupid girls
Maybe if I act like that, that guy will call me back
Porno Paparazzi girl, I don’t wanna be a stupid girl
Go to Fred Segal, you’ll find them there
Laughing loud so all the little people stare
Looking for a daddy to pay for the champagne
(Drop a name)
What happened to the dreams of a girl president
She’s dancing in the video next to 50 Cent
They travel in packs of two or three
With their itsy bitsy doggies and their teeny-weeny tees
Where, oh where, have the smart people gone?
Oh where, oh where could they be?
Maybe if I act like that, that guy will call me back
Porno Paparazzi girl, I don’t wanna be a stupid girl
Baby if I act like that, flipping my blond hair back
Push up my bra like that, I don’t wanna be a stupid girl
(Break it down now)
Disease’s growing, it’s epidemic
I’m scared that there ain’t a cure
The world believes it and I’m going crazy
I cannot take any more
I’m so glad that I’ll never fit in
That will never be me
Outcasts and girls with ambition
That’s what I wanna see
Disasters all around
World despaired
Their only concern
Will they **** up my hair
Maybe if I act like that, that guy will call me back
Porno Paparazzi girl, I don’t wanna be a stupid girl
Baby if I act like that, flipping my blond hair back
Push up my bra like that, I don’t wanna be a stupid girl
Stupid Girl — Pink
Half a million for that turd. Ha. Look for that toad stool to bottom waaay out at what…$175? People are in for a hard-core education on how the world works and who’s in charge.
Allan,
At least it IS under $300/sf. Remember just a year ago when junk like this was way more expensive.
I hope the agent stops by. I posted a little marketing suprise that “his site” features – redirecting traffic that wants to contact HIM, to other agents. Not that Tom is doing that bang up of a job already, but still.. “professional” backstabbing IS soooo tacky.
another factor pushing women toward this foolish decision was the combination of unprecedented income for them and the nesting instinct that men lack. men, as a very general rule, may be nuts about wanting a great car but are much less so about having ‘a place of my own.’ women want a NEST.
For those women that bought early enough in the rally, they were able to satisfy the nesting instinct, go to Pottery Barn and decorate it with trendy furnishings, and for a few years, the house would pay off their credit card debts each year. The house was a better provider than most men would have been.
As a single/no kids woman who bought her first house in 1997, I was astounded at how many times I had to read and sign (my name) an UNMARRIED WOMAN. I remeber thinking, wow, is that some kind of disease? I really enjoyed the decorating but never used it as an ATM and sold early this year to a single guy who loved my decorating style and bought some of the furnishings. Thanks to agressive payments, no HELOC and reading this blog and Calculated Risk, I took a low ball cash offer in Jan08 and walked away with 200k. I feel like I got out just in time!
Smart girl.
When I bought my place, I had to sign the same thing. sign, unmarried man.
One other thing: companies *prefer* married men. The wife closes out the other half of the pincers catching a man right in the cojones. I’m getting ramped up. I should go do something else.
I think they REALLY prefer a married man with a mortgage.
Free-ranging mavericks can be nice to have around, but they aren’t afraid to kick the cowboy.
That’s nothing girlbear. My single female friend in Illinois bought her first house about 10 years ago….and had to sign above the word SPINSTER.
http://en.wikipedia.org/wiki/Spinster
Very true about men. If I hadn’t married (or wanted to) I would have been perfectly content to live in a studio apartment my whole life, regardless of my income. I would rather save money, or spend it on something other than housing. My free time would not be spent at home, so no need for a big place. But when men want to date or marry, they must consider the female of the species and her various wants…
Actually, any woman that wants to marry me had better consider my needs. I’m a damn good catch, as first wife now knows.
Marriage is the only legally binding contract I know of where one party can walk away for no reason, no reason at all and over the objection of the other party, and be financially rewarded.
This is pushing my buttons now, so I will stop here.
“Marriage is the only legally binding contract I know of where one party can walk away for no reason, no reason at all and over the objection of the other party, and be financially rewarded.
”
I feel for ya Dave, Ive personality seen this happen MANY times.
As my dad says: Never EVER marry a woman with kids, and never EVER marry a woman, UNLESS she has EQUAL or GREATER assets…
OTHERWISE: Just rent/lease her.
Wise man, my dad was…
I knew I should never have started reading today’s post/comments. I am going to go kick the cat.
“I knew I should never have started reading today’s post/comments. I am going to go kick the cat. ”
Is that cat male or female ?
ooopss….
ISM: no worries on my part. I read your post
below. The ex left in part because I would NOT
buy a house during requiring two incomes, when
she had a habit of walking off the job. Yes,
poor screening on my part. Yes, I am
sentimental, and yes, I loved her very much,
enough to marry her.
Dick: I get a considerable amount of action
(more than enough frankly) by upholding my personal standards for relationship behavior
and appreciating women as women, and as individuals. I can tell you from
personal experience that bitterness, cynicism,
and sarcasm, in general, are not attractive
to women.
That’s why you marry a frugal, practical, easy going girl. Oh yeah, there are not many of those around.
I got lucky I guess.
I don’t know if it was fraud, but it definitely was stupid. My guess she thought she was going to make easy/big money by becoming a “professional” real estate developer. After all wasn’t that the bigger message during the boom?
It is women like this that give women like me a bad name – though stupidity knows know gender, race, or income boundaries. I bought a house at the end of 1999 just before prices started the vertical rise (4 months later I couldn’t have afforded my house) with a 30 year fixed rate. I refinanced to a lower interest rate a few years later and had “earned” so much equity that I lost my PMI and refinanced into a 20 year – and my monthly payments were still lower. Yes I have taken out a home equity but with that I got a new kitchen, bath, roof, windows, stair rail, etc. (all of which were really needed – it wasn’t just vanity). I think I have been very responsible and it ticks me off to see situations like this.
During the boom when I would talk about my situation I told people that I got lucky with my times but that in many was the market scared me. They would smile and say isn’t that great! But I couldn’t help feel a bit resentful that even though I didn’t want to move/upgrade, that there was no way that I could (and it still that way). And the rising prices wasn’t just driven by new homeowner but by speculators who would buy cheap do some cosmetic upgrades than put it back on the market at a huge mark-up.
ET, Great timing and financial responsibility you have illustrated.
However, how much of the paper equity and gain have been given back by now?
“However, how much of the paper equity and gain have been given back by now?”
Are you implying she is stupid for not selling? I say leave her alone. She has done well with her smart and prudent living and should not be ridiculed for not try to play the market; a notoriously difficult thing to do. (Even though that is what I am trying to do. Hopefully it does not backfire.)
“Are you implying she is stupid for not selling?”
IMHO, Yes.
“Hopefully it does not backfire”
As the old saying goes…. You can HOPE in one hand, and WISH in the other…
sorry Walter, I was out of line on those comments… My apologies.
Can’t sell now or during the heyday because I couldn’t have afforded to buy or even rent.
Even with the HELOC and the selling price I would likely still make $150,000+ on the property. Sure if I had sold during the heyday I could have made more than that (an identical to mine was sold for $520,000 though listed for $470,000 in summer of 2005) but then where would I have lived?
So I don’t consider myself stupid for NOT selling then or now.
>> Personally, I think this property is ugly inside and out, but then again I will not be buying for a couple more years, so my opinion doesn’t matter much right now.<< Neither does mine since I'm thousand miles away. It is dated and tired inside and out. Let's assume $2500 monthly rent and GRM 160 which comes to $400k. No one should offer more than this amount.
http://www.iht.com/articles/2008/08/03/business/mortgage.php
A second, far larger wave of U.S. mortgage defaults is building
By Vikas Bajaj, New York Times, IHT Monday, August 4, 2008
NEW YORK: The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is building with alarming speed.
After two years of upward spiraling defaults, the problems with mortgages made to people with weak, or subprime, credit are showing the first, tentative signs of leveling off.
But with the U.S. economy struggling, homeowners with better credit are now falling behind on their payments in growing numbers. The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A, or alt-A, mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.
While it is difficult to draw precise parallels among various segments of the mortgage market, the arc of the crisis in subprime loans suggests that the problems in the broader market may not peak for another year or two, analysts said.
Defaults are likely to accelerate because many homeowners’ monthly payments are rising rapidly. The higher bills come as home prices continue to decline and banks are tightening their lending standards, making it harder for people to refinance loans or sell their homes. Of particular concern are alt-A loans, many of which were made to people with good credit scores without proof of their income or assets.
Much will depend on the course of the economy, particularly unemployment. A weaker job market would push more homeowners toward the financial brink. The U.S. Labor Department reported Friday that the unemployment rate climbed to a four-year high in July. Other downbeat reports last week documented another drop in home prices, slower economic growth than expected and a huge loss at General Motors.
“Subprime was the tip of the iceberg,” said Thomas Atteberry, president of First Pacific Advisors, a investment firm in Los Angeles that trades mortgage securities. “Prime will be far bigger in its impact.”
During a conference call with analysts last month, James Dimon, the chairman and chief executive of JPMorgan Chase, said he expected losses on prime loans at his bank to triple and described the outlook for them as “terrible.”
Delinquencies on mortgages tend to peak three to five years after loans are made, said Mark Fleming, the chief economist at First American CoreLogic, a research firm. Not surprisingly, subprime loans from 2005 appear closer to the end than those made in 2007, for which default rates continue to rise steeply.
“We will hit those points in a few years and that will help in many ways,” Fleming said, referring to the loans made later in the housing boom. “We just have to survive through this part of the cycle.”
Data on securities backed by subprime mortgages show that 8.41 percent of loans from 2005 were delinquent by 90 days or more or in foreclosure in June, up from 8.35 percent in May, according to CreditSights, a research firm with offices in New York and London. By contrast, 16.6 percent of 2007 loans were troubled in June, up from 15.8 percent.
Some of that reflects basic math. Over the years, some loans will be paid off as homeowners sell or refinance, and some will be foreclosed and sold. That reduces the number of loans from those earlier years that could possibly default. Also, since the credit market seized up last year, lenders have become much more conservative and have stopped making most subprime loans and cut back on many other popular mortgages.
The resetting of rates on adjustable mortgages, which was a big fear of many analysts in 2006 and 2007, has become less problematic because the short-term interest rates that many of those loans are tied to have fallen significantly as the Federal Reserve has lowered U.S. rates. The recent U.S. tax rebates and efforts to modify more loans have also helped somewhat, analysts say.
What will sting borrowers more than rising interest rates, analysts say, is having to pay interest and principal every month after spending several years paying only interest or sometimes even less than that. Such loan terms were popular during the boom with alt-A and prime borrowers and made sense while home prices were rising and interest rates were low.
But now, payments could jump 50 percent or more for some borrowers, and they may not be able to sell their properties for as much as they owe.
Prime and alt-A borrowers typically had a five- or seven-year grace period before having to start making payments toward their principal. By contrast, subprime loans had a two- to three-year introductory period.
I was astonished that it took the NY Times so long to notice this issue, which has been featured in very clear charts and discussions on IHB and the sites IR links to for months. But it’s finally front-page stuff in the mainstream media (the article pasted in above ran on A1, extreme right, above the fold). Hmmm. Maybe this is the bottom?? (Sort of the reverse of the shoe-shine boy giving JP Morgan stock tips, or however that old story goes).
I’d also like to add that a lot of media venues fed the whole fad, and “fad” is pretty much the way to describe it. Until about maybe six months ago, the Dallas Morning News and its daily freebie companion, DFW Quick, had any number of house ads hyping how “there’s never been a better time to buy” for single women, and several women in my old office bought into the whole zero-down, interest-only loan scam because they finally figured that they had a chance to buy a house. The first buyer set off a bit of a storm, and before you know it, everyone else was jumping to buy a house, right at the peak of the boom.
I think another factor, that’s poorly acknowledged, is the pressure of the office rat race. I’ve seen the cycle for marriage and then baby-rearing, in both men and women, far too often: one of the office drones decides to get married, his/her friends see the party and presents and figure that it’s time to get some of the goodies, and the boom continues until the Law of Diminishing Returns kicks in with the latest wedding in a gas station with a moldy vegetable plate for catering and gifts consisting of $5 Target cards. That’s right about the time the first babies from the first weddings start getting hauled around the office, and then you see an office procreation boom. Housebuying just became another version of this: after listening to my co-workers go on and on about their great houses bought with zero-down ARMs, the pressure to succumb myself was pretty intense. However, I did, and now many of those old co-workers are back to renting after they lost their houses to the bank.
You are the company you keep. We are social creatures constantly adapting to our environments. I’m fortunate to be in an office of misers (e.g. most of my coworkers earning six+ figures drive cars worth less than $10K).
I often feel like a loser at work. My car is worth less then $2,000 and I fix it myself. The few hundred thou in the bank just wants to buy me a new car, but I keep telling it to sit down and wait for bigger plans.
Funny thing is I know many of my co-workers with the slick cars are pay check to pay check, but our society wants to make you play keep up.
Maybe when I get a cheap house, I can put the new car on a HELOC!
I had a $15,000 1956 porsche that I finished redoing. Why or why did I ever sell it? For some reason I didn’t drive it that often. I am tempted to see who has it now.
Yep! That’s kinda me also. My most expensive car is a 1989 Mustang (we won’t go into how much has been spent INTO it… he he – its slow…really. )
My daily is a 2005 Ford Focus that I purchased for $8900 new, put 2k down and finished paying it off in 2 years. The other money went to purchase a set of apartments as well as a few other properties.
I do jealously look at the new sports cars and fast sedans, but the will to retire early FAR outweights the will to purchase a newer toy.
-bix
Who do you think most (if not all) of the housing pornography was aimed at?
LOL! Ever notice how many of these flippers are selling their techniques on TV now? They can’t make anymore money in the market so now they are trying to sell books and “flipper kits” to all the ignorant, lazy, greedy knife catching sheeple out there.
These real estate evangelists should be in jail.
Flipper kit, I like that.
The new trend is in foreclosures.
“How To Profit In The Foreclosure Market” by some starving ex-real estate agent.
AZDavidPhx, there is a RE couple which has been working my area regularly (roughly the Squaw Peak/Mtn Preserve area) for years, the Schwartzes. Their last mailing has them touting their foreclosure/short sale homes.
This is a first for them, the market must be very bad if even these experienced pros feel the need to branch out because there is just nobody buying unless they have a good-sized down payment and can get a great deal, and nobody is selling except distressed sellers.
I bicycle ride this area a lot and I have certainly noticed very few new sellers, and the ones that are for sale are the same ones every single week.
Mar 19, 2008 $649,900
May 05, 2008 $609,900
Jun 02, 2008 $594,900
Jul 24, 2008 $559,000
I have to laugh at the banks as they follow the market down just like everyone else. Those MBAs lack the “street knowledge” that seems to only exist on the blogs.
Lot Size: 3,420 Sq. Ft. = Detached Condo
Those MBAs won’t be giving back the bonuses they made pushing those loans in the boom times. The company they worked at may go under, but they won’t care as they sip Mai Tai’s on a distant tropical island with all their newfound wealth…
.. losses aren’t their problem, it’s the taxpayers. Privatize the gains, socalize the losses once again…
I think a lot of you are awfully optimistic about how much lower prices can go. $400k at a GRM of 160? I would bet in the end that places like this go for half that amount. Don’t think it can’t happen.
The reality is that when a property is priced right, it sells. The thing that is interesting about this bubble and crash is that there is still demand for housing as a purchase. This will put a floor in prices.
In the last bust of the late 80s/early 90s, demand dropped off a cliff.
If the idiots at the bank would drop todays prop to 450k, it would sell in an Ipop-minute.
Also true considering that 417K is still a magic # in terms of non-jumbo rates. 416 + 60 (down) – 15K for closing = just a little north of 450K.
A pretty reasonable price for a person with a good income. But noooooo…
…and I thought America was good at clearing markets….more proof that the lenders have their heads up their ******:
—————————————
Fannie faces glut of unsold homes
Mortgage giants own 44 percent of foreclosed homes
….
Fannie Mae’s goal in selling its properties is to get the highest possible price, even if it means hanging on to them longer, said Gabrielle Harrison, a vice president at the company.
“We want to treat that home as if it was your own, or as if you were living next door to it,” Harrison said. “You wouldn’t want that home to bring down your property value.”
…..
http://preview.tinyurl.com/5cug2p
Actually, I think it makes sense for Fannie Mae to do this.
When he says that “You wouldn’t want that home to bring down your property value,” FANNIE MAE doesn’t want it to bring down your property value. If a neighborhood plummets in value, Fannie will end up foreclosing on a bunch of houses.
Fannie Mae wants to let the air out of the bubble as slowly as possible because, that way, they’ll get the most for each individual property (and could quite likely end up foreclosing on fewer properties, as time will enable some to sell….there are always knife-catchers)
And this is why the Merrill firesale of CDOs to Lone Star worries me. Fannie would rather hold onto these properties longer, to try to sell them for a higher price. How much more will Lone Star, who stand to make A LOT of money if the housing market stabilizes again, be willing to keep houses unsold to ride out the storm? Yeah.
So what will happen is these empty homes will be rented out again. Our homes will be owned by hedge funds, knife-catcher PE firms, and sovereign wealth funds. In three years look for local communities to start passing strict pro-tenant laws, which will be fought every step of the way by the federal government. This is America, after all.
Small time landlord as a path to financial independence is probably finished forever. Certainly in the larger metro areas. Who can afford the legal staff?
Large corporations, that’s who.
Pro-tenant laws and rent control *favor* big corporations, the bigger the better. Pass all the laws you want, most tenants are going to go up against a corporation owning 1000, 10,000, 100,000 units. Why can’t people see this?
I think it’s a race between that, and not being able to keep up the houses that you have, and
believe me, they aren’t keeping them up. So they are between a rock & a hard place–sell them cheap, but sell them, and then have to foreclose on more because now the neighbors are under water, or watch them deteriorate, so nobody will buy them for any price
Glad I don’t have to make that decision.
Nice broken rail in the second photo; really makes the place look well maintained. The kitchen cabinets are definitely original 1977 vintage.
It always freaks me out a little to see a place that hasn’t changed much since it was bought.
Well, my house has about 1988 kitchen cabinets and what do you know? I put a can of soup in them on Monday and I can take the same, undamaged can out on Thursday and heat it up on my 1992 stove top. Now I wouldn’t ask for extra money for my house based on the kitchen, but the meals all seem to taste the same. Of course I’m a guy, so what do I know?
“We can DO this, Honey!”
LOL ! Suzanne researched it !
“We can DO this, Honey!”
Suzanne Research this….
https://www.youtube.com/watch?v=Ubsd-tWYmZw&eurl=http://housingpanic.blogspot.com/search?updated-max=2008-07-31T08:41:00+01:00
Suzanne, YOU SUCK! Im sure all your “friends” HATE you now. har har har.
Today’s featured listing’s agent has been notified:
http://www.homethinking.com/1762716-Tom-Moon-Pacific-Moon-Realty.html
Tom Moon might actually be a bit perturbed to find that when I went to sent him a message via that site, that it said that I left out key information ( I didn’t) and let me fill in the blanks again. I did so and THEN i got a message saying that I might want to send my inquiries to these three other agents using a group email function – because, as the site points out- sometimes its best to get several perspectives before choosing an agent. Ouchies, Tom. Looks like they are poaching your potential clients.
So, I sent the other three and invitation, too.
Sounds kind of crappy that you are messing with his site.
What is your personal beef with him?
I sent him an invitation to join the discussions here. Nothing personal at all. I let him know that his listing made the post of the day here and sent him the url.
I’d say he has more to worry about with the “friendly fire” at his own site where email inquiries are redirected to other agents.
There is demand and a “floor” now. Its just leg 1 or leg 2. When sales flatten – at whatever level- for an extended period then we will be at a bottom.
It is obvious now that everyone is holding on. There really is no other choice. “Holding on” has ALWAYS worked before – but before all you had to do was remain employed – your payment will never increase due to fixed rate products. Now with so many residential ARMS and an easy credit generated house building boom – holding on will be different because is was bought with an intent on selling with appreciation.
So much of waht is discussed here is dead on analogous to the philosphy of trading stock options.
If only you could live in a out-of-the-money housing “put”!
Women were no more foolish in their “nesting” urge during this past rampage than were all the male Trump wannabes
I have the ‘nesting’ urge, and it hurt to watch prices ratchet up and away into the stratosphere, way past me.
IR, I know you don’t mean to sound sexist or to make it sound as though women as a catagory were more prone to making extremely unsound decisions, but it sort of sounds this way.
The speculative mania was a unisex, multi-cultural rampage driven by extremely easy money, and the fear of missing out on what was touted by our experts and leaders as the greatest wealth creation machine ever devised. It played right into Americans’ penchant for Magical Thinking and their vast sense of entitlement to rich rewards with no strenuous effort. It played to the egos of the baby Trumps flipping their condos, and to the vanities of people whose whole claim to distinction is their willingness to spend obscene amougnt of imaginary money on lifestyles just to impress people they don’t even know.
Amen, sista!
“The speculative mania was a unisex, multi-cultural rampage”
This is certainly true. What is interesting is that women managed to achieve equality in this area. Prior to the bubble, women were a smaller group, as a percentage of all homeowners. In the bubble they were enabled to screw up just as badly as the men did.
I think a better way to think of it is that the housing bubble in general opened the opportunity to “purchase” a home to lots of people who had never had that opportunity before. Now that the bubble is crashing, we are able to see some of the internal, group, and social pressures that pushed different categories of people into homes that weren’t tenable long-term for them.
Single women, in particular, seemed to often have some stereotypically “female” reasons for ending up screwed, but that’s not to discount that lots of people are screwed, for lots of different reasons, and doesn’t mean that the women are “worse” than anyone else (unless they were acting fraudulently, of course – and that knows no gender boundaries I know of).
A personal example. I am a 31 year-old life-long renter. One of the fundamental reasons I ended up divorced 4 years ago is that my ex-wife wanted to buy (she called it investing) and settle, and I didn’t feel we were ready for that. I didn’t want to buy a home unless I was in a long-term situation that justified it.
Long story short, we divorced (for lots of other reasons too), I moved to NY and now CA, and she stayed in VT and bought a condo on her small salary. I found out just last night she is selling her condo and moving to Seattle.
I’m not going to pretend to understand the underlying motivations in every situation, but there’s no doubt that without the easy financing available, she wouldn’t have qualified for her place. I hope it works out for her, but I’m sure there are many who have similar stories right now where things aren’t quite working out so well.
“Women were no more foolish in their “nesting” urge during this past rampage than were all the male Trump wannabes ”
I doubt that. The man was creamed during the 2000 dot.com bust, now it’s the wife/woman’s turn to get CREAMED…
“…all the male Trump wannabes ”
And IMO, most (but not all) of those “male” Trump wannabes were homesexuals (Wannabe females)… Look at those shows on HGTV, and you’ll know excatly what Im talking about.
Dick, you really are.
IR, the video isn’t working. When I click on it, the message “sorry, this video is no longer available” comes up. I checked it in YouTube and it works fine…perhaps just needs a reload on the blog.
I didn’t notice that embedding was disabled. I found a live version that is embedded now.
In my neighborhood (small, starter condos in South OC that were ridiculously expensive at the peak), those single women homebuyers are divorcees (if I pluralized that word correctly). In the last couple years there has been a big upsurg in single women, often with families, moving into the area. I’m guessing that with the downpayment requirements eliminated, they were finally able to get into homes. Situations like that strike me as being a positive side-effect, assuming that they can afford the payments. So far our foreclosures have been very limited, but time will tell.
If your no-money-down neighbors bought at a reasonable multiple of their incomes, have their other bills in hand, and didn’t borrow against their equity as the prices rose, then they are probably alright.
I know many people who bought with no down payments, and paid rather more than they really should have for their incomes, but these people will do ANYTHING to hang onto their condos, including but not limited to taking second jobs, selling thier cars and using transit, and living on a diet of raman noodles and potted meat. Walking away is not an option to these people- they bought in order to have a place they could put work and love into without getting an eviction notice from the landlord a year later because he decided to convert the place to condo.
Honestly, I think there MAY have been a gender component to this. Let’s face it: there are a TON more single parent female-headed households than there are male-headed (due to divorce proceedings and simple societal biases-whether right or wrong-for mothers over fathers AND a rather distressing number of fathers that choose not to take part in their children’s lives)
I wouldn’t be at all surprised if single parents were much more likely to get swept up in all this.
It’s VERY difficult to save as a single parent. When someone dangles a “home investment” with 0 down in your eyes, that’s a powerful incentive.
And, being a single parent, they’re much more vulnerable to a temporary problem leading to foreclosure (like loss of job or family member gets sick).
So, I’m not sure if we have to chalk this up to a “nesting instinct.” I wouldn’t be at all surprised if women WERE more likely caught up in all this simply because single-parent families would be more likely to get caught up in all this.
I rather doubt that single parents were any more likely to get caught up in this, for the very simple reason that creditors are extremely irrational.
Believe or not, even in those times of NINJA loans and the loosest lending standards in the world, creditors were much looser about making oversized mortgages to married borrowers, while being a little (only a little)tighter with single borrowers of either sex, on the premise that a married couple has a more secure income base in that each partner constitutes a backup for the other- if one loses a job, say, the other one might still be bringing in money.
If a singleton loses his job, there is no income, period.
I saw a lot of oversized loans among singles, to be sure, but those granted to married couples were much larger relative to their incomes. For example, I was offered numerous loans for 5X my income, but only married couples were offered loans for 9, 10, and in one stupefying case close to me, 15X their incomes.
That’s right, folks, some people here got loans for 15X their incomes. A married couple with a combined income of $60K a year bought a house in Park Ridge (Hillary Clinton’s hometown) for $900K with no down and a very flexible (har) mortgage. They bought next door to a wealthy older friend, a man who never borrowed money in his life. He told me of this little debacle. I give you 3 guesses as to how long this couple lasted in the house.
18 months or less – Is my guess 😉
This young couple was blown out of the place in 6 months.
I believe that it took only that long for them to pile up enough neg equity for the loan to reset. After all, they had to be making the absolute minimum payment- and struggling with that- on such a mortgage with such an income.
Maybe it’s not so much a gender or marital status component as much as it is an generational component. I know many Gen Y’rs who have walked away from jobs when the going got tough. Why not walk away from their financial obligations as well?
I am a ‘young’ baby boomer. Back in 1993 we sold our second condo at a significant loss. We actually wrote a check to the escrow company to get out of it. We never considered walking away from our obligation. For us, this was the moral thing to do.
Stereotypes. Yes . . . but no.
Easy credit allowed many novices into “The game.” It wasn’t greed across the board, but the REMAX commercials with the minorities (yes i said it) and in this case women FINALLY getting their piece of the “American Dream.”
Unless, you know “these people” and I do, a large number would/will sign anything to get into a better neighborhood and out of their terrible rental conditions. When they say they didn’t read the mortgage, they mean they didn’t read ANYTHING and, guess what, they wouldn’t have understood it if they had read it. “Have an attorney read it over?” Yes, they will do this from this point on.
I am as conservative as you can get on many issues. But when the opportunity to move your family from squallor, crime, and hopelessness – let alone poor schools – to a better chance presents itself. . . .
And, remember, before this recent cycle, when a family got a home, generally, they kept it. Maybe the utilitese got turned off a couple of time, but grandma kept the home. And, big lenders, simply wouldn’t allow you to participate in loan products that you wouldn’t be able to afford in 2-4 years. Right??
Yes, uneducated, uninformed,above their head, out of their league – whatever. But, many of these first time homeowners were simply duped and not the “planning your bankruptcy” scammers. Everyone was not the ubergreedy Extreme Makeover family from Atlanta.
Flippers had the game down to a science. If they can get “these people” to tour the property and see living conditions quantum levels above where they were at present, “these people” would sign on ANY dotted line to get in. Add easy credit lending and the rats were lining up at the trap.
I think some folks felt more comfortable with housing as an investment because it’s tangible… like beanie babies…
One of my genY colleagues is VERY financially astute… she attributes this to her mom and to her HS home economics class, which taught budgeting and…home economics. My HS home ec was cooking and sewing, not that anyone college bound could have fit it in their schedules.
I was hoping you’d use “Stupid Girl” by Garbage. I like that song better.
me too.
(not that I can recite the lyrics to see if they’re more or less appropriate…)
I was hoping to hear that one as well. The lyrics don’t work at all though, other than “A million lies to sell yourself…” Metaphorically speaking anyway.
me three
me four
If I say I’m renting a condo in Huntington Beach for $3000K a month, what is the realistic price for that property based on the going rents?
Assume it’s 3K a month not 3 Mil a month. Duh!
It depends on your assumptions. If you use market GRM for your neighborhood, you will get an inflated value (assuming that prices will continue to drop). George8 assumed a 160 GRM for the featured property earlier, so if you use that number, you’re looking at $480k ($3k x 160).
The best way would be to find comps and figure that to be a ceiling/high value for the property.
Here is a pretty good explanation: http://www.invest-2win.com/grm.html
The difference between a planned Irvine community like Woodbury and the older communities of HB is that in Woodbury there are exact copies of every home, thus lots of direct comps. The only difference being the level of internal pergraniteel. I too am paying $3k to rent. I am waiting for prices of the same unit that I am in to fall below $450 before considering becoming a buyer. Keep in mind these units were purchased from the builder on a long waiting list for $600k. They then inflated to as high as $900k during the insanity. Now there are some listing for $575 – $675, apparently not selling. Amazing how many people have told me that I am crazy to think the price will drop below $450k. Some of them wave to me as they drive away with their remaining possessions in a moving van. I take comfort with the folks here on the blog and continue to wait it out.
Does that rent include utilities, or are they extra?
If the rent is just the rent and does not include anything, deduct the monthly property tax payment to arrive at the true rent, and multiply that by 160.
If, after making that deduction, which I am guessing is $400 a month, for $2600 real rent, I would figure $416K.
I sure hope it’s a nice place.
3000 X 120 (Investor) = $360,000
3000 X 160 (Live in homeowner) = $480,000
But you would have to figure out condo fees and play with the math a bit. This given scenario is for an SFR with PITI (and some maintenence) only.
I agree with IR, girls are stupid.
This place should be leveled.
Tell me IHB has not “jumped the shark”.
Is this aim at controversy intended to increase readership? I would suggest you return to what you do best: thoughtful analysis of specific cases from the great U.S. housing bubble.
I don’t consider myself P.C., but I certainly believe stereotypes are harmful. You are generalizing a population based on a minority of scenarios.
In the end, we are each individuals and deserve to be treated without preconceived notions built up through the representation of stereotypes.
Why not focus on the issues at hand: housing mania=bad, flipping=bad, Heloc for higher standard of living=bad, saving up for downpayment=good, planning for future home ownership=good.
I realize there are some terrific threads in the forum about saving for a down payment, but I don’t recall ever seeing a poll on the blog. Of course, I’m not exactly a daily reader either.
So forive me if you’ve already been there and done that, but here are some ideas for a poll that might lead to interesting analysis:
Assuming you found the home of your dreams today at your target price:
Will you buy it?
Do you know the requirements necessary to buy it?
How large is your down payment?
(0%, 1%, 3%, 5%, 10%, 15%, 20%, 21-49%, 50-99%, 100%)
How much of your net income is consumed by the monthly payment?
What it your debt-to-income ratio for this purchase?
Do you meet the necessary requirements to buy it?
“In the end, we are each individuals and deserve to be treated without preconceived notions built up through the representation of stereotypes.”
Give me a break. Your comment is stereotypically P.C. and you don’t even know it! LOL!
There is nothing wrong with stereotypes. You are not a unique individual. Get over yourself.
I don’t think IR jumped the shark at all.
In fact, I would like to see some in-depth and detailed analysis on how property during the bubble was marketed specifically at women buyers.
As IR said, we (our society) achieved remarkable equality during this last round. Women were offered the chance to participate, and they did. That some of them proved equally stupid (or emotionally impulsive more likely) is not a topic to render taboo. We won’t learn anything if we do.
People purchase (or not) largely due to emotional considerations. Understand those emotions, you have a powerful lever.
IR, I hope you continue with these kinds of “soft” posts. How we as a society were able to persuade ourselves that “spending is saving” is a remarkable story, and some of that should be told here.
Following the NYTimes throughout the bubble they would seem to target certain demographics at certain times with articles about those specific demographics in the RE section.
The last two that I remembered were young couples (Gen X & Y) and single women. For the one targeting younger people there was even a quote that stated that it was the young people these days that “had the money to spend” and that the older people were just “kicking tires”.
After I split with my ex-girlfriend in ’04, I finished fixing up my home and sold in ’05. She bought late summer ’05 and is 200k upside down (per most recent comparable sale) on her 570k condo purchase with her new husband.
Every woman I dated from 2005-2008 had recently purchased a condo and all of them stated that it was cheaper than renting, which led me to believe that they had neg-am loans.
They all asked me…
“Why are you renting in your 30’s? When are you going to buy your *own* place?”
…with a condescending voice.
Try explaining that to a woman on a date…especially one who you found out bought at the peak of the bubble and you know damn well that they can’t afford it.
It may sound bad, but I’m actually avoiding dating “women that own” currently. If I meet a woman that rents and has an aversion to shopping and debt, then I’ll be tickled pink.
“If I meet a woman that rents and has an aversion to shopping and debt, then I’ll be tickled pink.”
Good luck on your endeavor, hopefully she won’t be a “two bagger”.
I’m looking at this property and it’s not giving me any good vibes. Would not buy.
One of the reasons I asked my ex for a divorce in Oct 2005 was that he would have never, EVER considered selling the house and renting, whereas I was red hot itching to unload our house before the crash. There always had been a fundamental disconnect between our approaches. After the divorce (we sold the house in 13 days) he bought two new cars and a new house twice the size of what we had sold. I moved into an IAC rental and, 3 years later, am still driving the same car, now with 110k miles on it.
Every now and then there will be comments on a post, or in the Forums, where a bunch of men bend over backward to agree with each other that women are bimbos and don’t understand money. (I’m not remotely accusing IR of this – just some of IHB’s commentators). Look in the mirror, boys. Ask yourselves why you are attracted to vapid women rather than women like me, Eva, Cayci, etc., whose bank accounts and IQs would probably put most of yours to shame?
Thank you ism.
I haven’t really followed many comments on the main blog, but where did this *dick* come from ? Oy vey.
I remember reading the following article before the housing collapse was recognised by the hoi polloi:
http://www.forsalebyowner.com/education/index.php/buying-a-home/94-a-woman-sees-a-house-differently-from-a-man-and-its-her-opinion-that-counts-most-when-time-to-buy
“Meanwhile, single women accounted for 22% of all home purchases during the period from July 2005 through June 2006, while single men accounted for 9%, according to a National Assn. of Realtors study.”
Numbers are numbers.
When people ask you why you are “still renting” in your 30s, or 40s, or beyond, just reply as you would to any other nosy, inappropriate personal question:
“I have my reasons”.
If your inquisitor gets insistant, “I have my reasons, that are my personal business”.
I somehow feel OK about discussing my reasons with strangers on a website, mainly because that is what we’re here to talk about. However, when these questions are asked by more or less unfriendly acquaintances at your office, or some really competitive, image-flaunting social affair, you might just want to deflect questions like this, depending on the tone of voice or context in which they are put to you.
How good is renting with kids near, or at, school-age? I guess it’s ok in apartments (except with loud neighbors OR neighbors complaining about your kids making noise), but in private homes? The owners often want to sell after a couple of years (happened to us). Then we had to scramble to find another rental. Luckily, the kids were not yet in school. But had they been, and in the middle of the school year, that would suck.
I know many of you are fine with renting for the rest of your life, but *long-term* renting sucks with kids. (Short-term is always fine, though.)
Seems like many of you are divorced, or single men who don’t want kids. Good for you. But don’t pretend you know everything about everybody’s situation. Ugh.
Whatever. My parents rented different houses my entire life. By the time I left for college at the age of 17, we had lived in 13 houses. We suffered through the kinds of problems you mentioned, like owners selling the place from under us, or deciding to move back in themselves. And you know what? I’m fine with that.
It is a fiction of the corporate consumer society that you have bought hook, line, and sinker that says you need to own a home while your kids are at or near school-age. If you are in a financial and life situation where it makes sense, go right ahead. If not, go rent somewhere and focus on the things that actually matter.
And while you’re at it, don’t pretend you know everything about everybody’s situation. Ugh.
right on, periol. my family moved around for different reasons – we had our economic ups and downs – but it was an adventure every time. It probably wasn’t a picnic for my parents, but I’m not damaged by the experience at all. In fact, i think it gave me itchy feet for life, which is not a bad thing.
like, whatever. Nice comment by the way. Is this a goal for you – moving 13 times?? My parents moved 4 times while I was in school and it sucked. I always envied my friends whose parents just stayed put in the same house for 18 years. But that’s just not cool anymore, I guess.
Actually, there have been studies showing that moving around all the time when a kid is in school DOES affect them – academically and socially. It’s just not stable. Necessary sometimes, sure. But not stable.
That has to be the ugliest damn house I’ve ever seen. I don’t care if it’s in Irvine or not. I would however buy it if it were in Hugh Hefner’s back yard. 🙂