A strong housing market requires a healthy economy. California’s economy is a disaster. Let’s take a closer look today at the way it is.
Asking Price: $675,000
Address: 28 Bombay Irvine, CA 92620
Standing in line marking time–
Waiting for the welfare dime
cause they cant buy a job
The man in the silk suit hurries by
As he catches the poor old ladies eyes
Just for fun he says get a job
Thats just the way it is
Some things will never change
Thats just the way it is
But dont you believe them
The Way It Is — Bruce Hornsby
California is proud state with a long history. Now it is a mess. We have been living for the day for too long. Will we make another 100 years?
I was recently emailed a report (090906_labor_day.pdf) about the California economy. Here are the highlights:
The Recession Has Battered California’s Job Market
- Two years of job losses erased four years of job gains.
- California has approximately the same number of jobs as it did nine years ago.
- A smaller share of Californians is working today than at any point since the late 1970s.
- Recent job losses have been deeper than those of prior recessions.
- Nearly all major sectors of California’s economy have lost jobs during the downturn.
California’s Unemployment and Underemployment Rates Reached All-Time Highs
- California’s unemployment rate hit a record high of 11.9 percent in July 2009.
- More than one out of four unemployed Californians (28.2 percent) had been jobless for more than six months in July 2009 – the highest level ever recorded.
- Nationally, there were nearly six job seekers for every job available in June 2009.
- The monthly number of jobless Californians filing initial claims for unemployment insurance (UI) benefits increased by approximately 152,000 (81.9 percent) between June 2007 and June 2009.
- Many Californians are likely to run out of UI benefits before they can fi nd work.
- The number of underemployed Californians more than doubled in two years.
- Nearly one out of five working-age adults (18.5 percent) was “underutilized” in July 2009.
- Unemployment rates for California’s men and Latinos have risen steeply.
The Recession Has Diminished Workers’ Earnings
- Workers’ hourly wages lost purchasing power across the earnings distribution as the recession deepened.
- Reduced hours of work diminished many workers’ weekly earnings.
- The gap between low-wage and high-wage California workers widened during the past generation.
Recent Income Gains Were Not Broadly Shared
- The bulk of recent income gains went to the wealthiest Californians.
- Recent uneven income gains continue a longer-term trend.
- The top 1 percent of taxpayers has nearly doubled its share of AGI since the early 1990s.
- The share of income going to the top 1 percent of US taxpayers is at a 79-year high.
I am sure the rich fat-cats on Wall Street are suffering too…
Don’t worry, I am sure our inflated house prices will continue to rise.
Perhaps not…
Salinas, California, 1939.
Asking Price: $675,000 
Income Requirement: $127,796
Downpayment Needed: $135,000
Purchase Price: $975,000
Purchase Date: 9/27/2006
Net Gain (Loss): -$340,500
Percent Change: -30.8%
Annual Appreciation: -10.3%
Address: 28 Bombay Irvine, CA 92620
Beds: 4
Baths: 3.75
Sq. Ft.: 2,630
$/Sq. Ft.: $257
Lot Size: –
Property Type: Detached, Condominium
Stories: 2
Community: Northwood
County: Orange
MLS#: T09088634
Source: MRMLS
Status: Active
On Redfin: 35 day
Beautifully upgraded home in Irvine gated community. Granite counter tops, ceramic tile floors, down stairs master. Large back yard as well as front yard. Upstairs additional bedrooms along with very private suite and loft. Perfect for guests! End of Cul de sac!! NO SHOWING TILL AFTER Thursday 8 20
I wonder if the owner had to sell their SUV and buy the Mini…
This house was purchased at the peak with 100% financing. The owners gave up paying ages ago, but they took the free ride.
Foreclosure Record
Recording Date: 02/23/2009
Document Type: Notice of Sale (aka Notice of Trustee’s Sale)
Document #: 2009000080972
Foreclosure Record
Recording Date: 06/04/2008
Document Type: Notice of Default
Document #: 2008000268212
What will be left of California after the recession is over?
Unemployment is taking its toll. Nobody is safe.
http://www.msnbc.msn.com/id/32959437/ns/business-reinventing_america/
I thought the CA unemployment rate was 12.1%.
http://www.google.com/publicdata?ds=usunemployment&met=unemployment_rate&idim=state:ST060000&q=california+unemployment+rate
http://www.crackthecode.us/images/Dumb_Dumber_Burn_House.jpg
Husband and wife suspected of Fagin Drive arson
by Jennifer WadsworthSep 16, 2009 |
A husband and wife are suspected of burning down their $1 million home in Tracy last summer — a blaze that almost killed several firefighters.
Police on Friday arrested 31-year-old William “Billy” Tipton Jr. and issued an arrest warrant for his wife, 37-year-old Frayba Tipton, on suspicion of arson, forgery and insurance fraud. Billy Tipton faces additional charges of grand theft and two more counts of defrauding an insurance company.
The Tiptons, who lost their upscale home to a suspected arson fire in July 2008, told the Press the day after that they had taken their five children to Lake Tahoe for a Fourth of July vacation and that the loss of their home devastated them.
Not only did the fire destroy many of the family’s possessions, it also nearly killed several firefighters when it weakened the beams supporting a heavy slate roof that collapsed just 30 seconds after a fire chief ordered his crew out of the burning house.
Investigators immediately suspected arson, said Germane Friends, the Tracy Fire Department Division Chief who pulled his crew out of the Fagin Drive fire with seconds to spare.
“It was obvious at the time that it was an incendiary fire because it was started in so many different places,” he said today. “I know they started investigating that immediately.”
The investigation culminated in an arrest late last week.
Billy Tipton — who used to own a branch of West Coast Realty and Mortgage in Tracy without a real estate or broker’s license — was taken into custody Friday night. The West High School Graduate and lifelong Tracy resident appeared in court on Monday — nervous and shackled — when his private attorney Timothy Rein asked a judge to postpone arraignment until Thursday.
Billy Tipton was released from custody on Tuesday without having to pay a dime of his $300,000 bail because overcrowding at the San Joaquin County Jail squeezed him out. Frayba Tipton — owner of A+ Realty and Mortgage — is free of her own recognizance, but was ordered to appear in court with her husband on Thursday.
The charges filed against the pair come as no surprise to several people who knew them. For the past few years, an architect, a graphic designer, several banks and at least two insurance companies were looking for the Tracy family for either money or an explanation.
Public record paints a picture of a couple so dependent on the housing market that they lost virtually all of their property wealth when the economy tanked. They let several properties lapse into foreclosure as their income as real estate agents and brokers suffered from a dearth of buyers. Lawsuits demanding payment from Frayba and Billy Tipton show that the couple has had trouble keeping up with the bills for the past year or so.
Dogged by lawsuits and angry clients from the couple’s real estate dealings, the Tiptons eventually disconnected their business, home and cell phones last fall. They moved into a two-story rental in Hidden Lakes, an upscale subdivision very close to their ruined home.
The Tiptons are scheduled to be arraigned at 1:30 p.m. Thursday in Dept. 35 at the San Joaquin County Superior Court in Stockton.
And of course, leave it to the biased lib-brull media to just drone on and on about the dangerous fire and make no comment about how many jobs will be created in order to rebuild this McMansion.
These people should be given citizen of the year awards for helping to stimulate our economy!
53 Bombay is also listed at 2630 sqft and sold for 20% off new.
If you had a spectrum of home affordability:
1. afford comfortably
2. afford
3. at the limit if I stop contributing to savings
4. somewhat unaffordable, but tap heloc or cc’s to get by
5. are you kidding unaffordable.
A lot of the foreclosures I’ve seen have started @ step 5. If the move is from #5 to #4 or #3, we are still in a precarious position. I imagine many of those buying (in Irvine, other areas have been completely crushed) are still expecting 5 year appreciation and are willing to stretch to ‘get in on it’. That seems to be a remnant of bubble psychology that needs to be worked out.
Love the pic of great-grandma lighting the smoke on her 100th birthday cake. LoL
This has got to be one of the most toxic neighborhoods in Irvine. All these homes are in the same tract.
60 Bombay, Irvine, CA? – more info »
$710,000 0 bed 0 bath
“This property is a Pre-Foreclosure.
85 Wonderland, Irvine, CA? – more info »
$720,700 0 bed 0 bath
“This property is a Pre-Foreclosure.
38 Bombay, Irvine, CA? – more info »
$676,000 0 bed 0 bath
“This property is a Pre-Foreclosure.
26 Midsummer, Irvine, CA? – more info »
$768,000 0 bed 0 bath
“This property is a Pre-Foreclosure.
34 Bombay, Irvine, CA? – more info »
$792,000 0 bed 0 bath
“This property is a Pre-Foreclosure.
39 Hathaway, Irvine, CA? – more info »
$650,000 0 bed 0 bath
“This property is a Pre-Foreclosure.
38 Tea Garden, Irvine, CA? – more info »
$646,500 0 bed 0 bath
“This property is a Pre-Foreclosure.
53 Bamboo, Irvine, CA? – more info »
$720,000 0 bed 0 bath
“This property is a Pre-Foreclosure.
30 Bamboo, Irvine, CA? – more info »
$78,956 0 bed 0 bath
“This property is a Pre-Foreclosure.
49 Bamboo, Irvine, CA? – more info »
$739,500 0 bed 0 bath
“This property is a Pre-Foreclosure.
43 Bamboo, Irvine, CA? – more info »
$649,500 0 bed 0 bath
“This property is a Pre-Foreclosure.
65 Bamboo, Irvine, CA? – more info »
$530,000 0 bed 0 bath
“This property is a Pre-Foreclosure.
64 Secret Garden, Irvine, CA? – more info »
$850,000 0 bed 0 bath
“This property is a Pre-Foreclosure.
27 Secret Garden, Irvine, CA? – more info »
$895,650 0 bed 0 bath
“This property is a Pre-Foreclosure.
28 Grape Arbor, Irvine, CA? – more info »
$920,000 0 bed 0 bath
“This property is a Pre-Foreclosure.
Grape Arbor, Irvine, CA? – more info »
$830,750 4 bed 3 bath
“This is a Notice of Trustee Sale property and will go through an Auction process.
One more point. I really have no idea how the banks are gonna deal with this. Orange County will cost the banks billions in losses. Does the govt have a plan to backstop more (larger) losses, or, are they just dealing with the problems on a daily basis, as they evolve?
I think the plan is now reduced to the FDIC. Let the banks with bad assets fail, as long as they continue to do so in an tame manner. I actually like Sheila Bair’s new plan of borrowing from (instead of taxing) the strong banks to shore up the DIF. Reward the prudent/savy without raising premiums on the weak banks, and let the good banks mop up the casualties.
As fast as the Fed prints money, the banks absorb it all into bad debt.
I personally hate this idea, it is unfair and should be illegal. If the FDIC “fails” who will respond to the banks? Again, the US tax payer. So banks have a practically guaranteed loan and profit right here. Does that sound fair? FDIC should borrow from treasury. It is cheaper for them and for us tax payers. Why don’t homeowners lend money to insurance companies so they can insure them? Crazy idea. But I’m sure the banks will get away with it, Wall Street and politics are really stupid or corrupt.
It’s not just a bank problem. Some banks retained a lot of exposure, others got rid of the great majority of it.
There are a huge number of nonbank entities who will get hit: MBS owners, Fannie, Freddie, FHA (in Orange County, mostly on 2008 and later loans), and private mortgage insurers (who will be hit with policy limit losses on most foreclosures in CA now). Those are just the people who suffer direct losses.
Indirect losses include: the FDIC, bank shareholders, bank bondholders (you can make much more money owning bonds issued by a bank than CDs, if you are willing to take the credit risk), state and local governments, homeowners who weren’t foreclosed on, solvent members of condo associations and HOAs, and taxpayers.
Some people and institutions will benefit. By far the largest beneficiaries in CA will be people who have jobs, can still afford a home, are not part of a troubled HOA or condo association, and buy near the bottom (late 2010 to at least 2012). Renters will benefit some from the excess supply and dropping rents.
There will be a vast number of servicers, attorneys, and appraisers kept busy by the process.
Have I missed anybody?
The Trashout Squad.
Cleaning up the mess has always required some real labor.
Hey Lee…can you show me what’s going on in my neighborhood on Misty Run, Thicket, and Greenbough? The zip is 92614. Thanks. 🙂
There’s only 1 on Misty Run, but there’s no address number for the home-debtor. There are none on Thicket or Greenbough.
Misty Run, Irvine, CA? – more info (corner of Misty & Goldstone)
$494,694 3 bed 2 bath
“This is a Notice of Foreclosure Sale property and will go through an Auction process.
However, less than 350 feet away, just outside the Yale loop, things go to hell very quickly:
44 Clearbrook, Irvine, CA? – more info »
$221,000 1 bed 1 bath
“This property is a Pre-Foreclosure.
35 Weepingwood, Irvine, CA? – more info »
$501,816 3 bed 2 bath
“This is a Notice of Foreclosure Sale property and will go through an Auction process.
96 Weepingwood, Irvine, CA? – more info »
$382,294 2 bed 2 bath
“This is a Notice of Foreclosure Sale property.
37 Weepingwood, Irvine, CA? – more info »
$429,000 3 bed 2.5 bath
“This property is a Pre-Foreclosure.
45 Weepingwood, Irvine, CA? – more info »
$411,200 2 bed 2 bath
“This property is a Pre-Foreclosure.
22 Heathergreen, Irvine, CA? – more info »
$464,000 3 bed 2.5 bath
“This property is a Pre-Foreclosure.
73 Weepingwood, Irvine, CA? – more info »
$420,000 2 bed 2 bath
“This property is a Pre-Foreclosure.
28 Echo Run, Irvine, CA? – more info »
$341,035 3 bed 2 bath
“This is a Notice of Foreclosure Sale property and will go through an Auction process.
13 Longshore, Irvine, CA? – more info »
$720,000 2 bed 2 bath
“This property is a Pre-Foreclosure.
Lee in Irvine,
This information you provide is great. Keep it up.
Weepingwood how appropriate
The year was 1992, and a Presidential Candidate said that if they passed NAFTA, there would be a GIANT SUCKING SOUND of jobs leaving the country.. I’m sorry to say it was Ross Perot..
Well, it passed it in 1994…
Oh we don’t need manufacturing, we have a much more advanced economy than those “3rd world countries” We can just import everything with our charm.. We’re Americans…
Now we have the Rubber toys, and China has the Money… and soon the Power…
Don’t blame me, I voted for Perot.
It’s really depressing. Have any of you read Greenspan’s autobiography last year? His laisez faire globalist attitude combined with the complete buyout of the polity by corporations and foreign interests are finally coming to roost.
Neither the Democrats or GOP, of course, can not be trusted to fix this as they are part of the problem.
Perhaps the shock of the last election might prod the GOP with new blood. I think the public reaction to Obama’s attempt to rapidly expand the role of the Gov. might help (Huckabee?) and introduce populism devoid of socialism and religion into our political arena.
In the meantime, this mess transcends the fiasco of the last five years. It’s no longer whether you’re a homeowner, homedebtor, renter of bum on the street (Come to think about it, being a bum on the street is likely the most insulated state to be in today).
Except the way Obamalosi is “helping” the Big Banks and Wall Street is shameful.
Also, hopefully the idiots running this state (and by that I mean the idiots from SF and The Westside and The “latino democrats”) might finally get kicked out of office in natural conclusion to Davis’ recall election. Thank God (in a metaphorical sense) for the end of gerrymandered districts.
“I think the public reaction to Obama’s attempt to rapidly expand the role of the Gov. might help (Huckabee?) and introduce populism devoid of socialism and religion into our political arena.”
Huh…??? Can you explain how the election of a Southern Baptist preacher as President would reduce the influence of religion in our political arena?
Nice right wing rant on “Obamalosi”. 8 months into office and we have conveniently forgotten who oversaw and took credit for all the good times we are currently paying for. Has an ex-president ever been more quietly sent to retirement?
The home highlighted today clearly illustrates the current pricing problem. The shock and awe short sale prices have become about market value. This house could easily sell for $600K and roller coaster heads downward.
Plus, Huckabee is the most socialist of the major Republican candidates, which is probably due to his religious ties (he would think the government should help the poor, etc.). He also might be open to government intervention in things like nutritition (taxing soda, etc.), due to his weight loss books and statements he’s made.
Basically, he’s a populist Democrat who hates abortion and gays (again, for religious reasons).
The list of Republican candidates who could possibly challenge Obama in 2012 is pathetic. Obama is a shoo-in for re-election. Now, the Democrats in Congess have more to worry about. However, if the economy does recover on schedule, unemployment should be dropping right around the November 2010 midterm elections. The Dems can say (rightly or wrongly) that the stimulus worked, and therefore do well at the ballot box.
I like Huckabee even though he doesn’t like the buttsxx
Obama is president and his party controls both houses of Congress with comfortable majorities. Irecall hearing that if we enacted his stimulus unemployment would top out at 8%. Now you can argue that Bush peddled a line of nonsense that had lethal consequences, but that doesn’t mean that his successor is competent.
“8 months into office and we have conveniently forgotten who oversaw and took credit for all the good times we are currently paying for. Has an ex-president ever been more quietly sent to retirement?”
So you don’t think Obama would have treated the housing bubble just like Monkey Man Bush did? LoL I know he would have! Barry’s number one contributor to his presidential campaign was none other than Goldman Sachs … perhaps the most crooked corporation in the world.
Obama is very likely going to be a failure because he’s a rigid ideologue. In fact, his reputation is falling so quickly, he may (remarkably) return the (idiots in the) GOP back to power in 2010.
Ok, I admit I … I hate-em all … I hated Monkey Man Bush, and I can’t stand the illegal alien currently in office.
ROTFLMFAO!
Don’t get me started on Perot. That man is (should say, was, since he has been out of the public sphere for 14 years now) a nutjob. His cretinous economic ideas are, luckily, stil discredited. If nothing else, I would never forgive him for turning Admiral James Stockdale, a great American hero, into a laughingstock.
IR,
This is what you have been saying all these years
http://www.inman.com/news/2009/09/22/role-cash-outs-in-crisis-studied
I knew HELOC abuse was big, but according to this study it is the primary cause of the foreclosure problem.
“A new study concludes that cash-out refinancings and home equity lines of credit played a larger role in the financial crisis than was previously understood, by greatly expanding and “synchronizing” the pool of borrowers at risk to price declines.
Academics at the Massachusetts Institute of Technology’s Sloan School of Management and Harvard University called the interplay between declining interest rates, rising property values and cash-out refinancing “virtually impossible to address” within the current regulatory framework, pointing to the need for an “independent organization” to study systemic risk.
The study, “Systemic Risk and the Refinancing Ratchet Effect,” included simulations estimating that without cash-out refinancings and other withdrawals of homeowner equity, only 3 percent of outstanding mortgages would have been underwater at the end of last year.“
I still wonder if any element of cash-out refi would have been reduced if your tax bill went up with the new appraisal.
That might have curbed some of the excesses. I think it is a great idea to re-appraise for property tax purposes whenever the owner does a cash-out refinance over their original purchase price. That one change would have dissuaded many of the semi-responsible ones. The truly kool aid intoxicated would not care because they believed they could keep borrowing more and more forever and ever.
I completely agree. The economy was held afloat for a long time by people using the equity in their homes as another credit card.
[b]Vero Beach Real
Estate[/b]
Very interesting study — thanks for the link, lb renter.
The Greenspan Chickens are coming home to roost.. So true Tonye.!!
Greenspan’s earlier Writings sound much like Austrian Economics or his former Libertarian ideas.. WoW what a change a few years makes..
The Globalists brought him up to the mountain and told him he could have all the world if he worship them… you know the rest of the story..
His Gramm-Leach-Bliley Act was the big blow to Housing..
Now the FED is the entire Obama Adm.
The study, “Systemic Risk and the Refinancing Ratchet Effect,” included simulations estimating that without cash-out refinancings and other withdrawals of homeowner equity, only 3 percent of outstanding mortgages would have been underwater at the end of last year.”
Seems a large percentage of people HAD to withdraw home equity just to pay the Mortgage…
They really couldn’t qualify in the first place…
Kind of what the FED is doing now.. buying our own debt..
Here’s an interesting take-away from that article that I haven’t seen addresses here before:
“…some who’d had comfortable levels of equity in their homes, and loans that were well on their way to being paid off — becomes synchronized, as if each had bought their homes at the height of the market with the highest allowable loan-to-value ratios.”
New loans are typically securitzed in 3 month batches, and I’ve seen some (even subprime pools) with default rates as low as 5%, and others – particularly 2005/2006 date ranges – as high as 40%!
Basically an investor that previously had a diverse portfolio of loans traded them for one syncronized batch of precarious loans.
“”No easy legislative or regulatory solutions exist, such as prohibiting the Fed from cutting interest rates below a certain threshold, or placing a ceiling on housing prices, or putting ‘sand in the gears’ of the refinancing system and limiting consumer credit,” the study said.”
This is not true. It is relatively easy to limit consumer credit; lenders need to stop making stupid cash-out refinance loans over 80%-90% LTV. It is the high LTV that creates problems. If people have equity in their homes, the odds of a downward spiral are much reduced.
“Instead, its authors recommend the creation of an independent organization akin to the National Transportation Safety Board devoted to the study, measurement, and public notification of systemic risk.”
Some professional economists should stick to analysis and forget policy recommendations. This idea is as stupid as any I have heard. The independent organization they propose creating will be the most widely ignored group in Washington when times are good.
I agree. If cashout refis and helocs were not eligible for a mortage interest deduction, that would have helped.
Prohibiting cashout refis and helocs above 80% ltv would have helped a lot too.
Oh, and if stated income had been prohibited, it also would have prevented a lot of these refis. Many people went from prime on a $300k full doc loan to subprime on a $600k stated income loan.
We had this problem around 1997 with subprime back then. 125% LTV cashouts caused it.
You all might recall that after much industry haggling, the regulators issued interagency guidance for ‘nontraditional mortgage lending’ in late 2006, almost a year after the guidance was issued in its proposed form (and that was a few years after they started talking about it!). Of course by then it was too late, even though it was pretty much the end of stated income loans for regulated financial institutions. And the regulatory heads were all begging for the guidance to apply to non-banks- with zero support from politicians who thought it would reduce homeownership, of course. Wall Street firms backed every major mortgage company that led the looser and looser lending and decided the underwriting standards (via direct ownership, warehouse lines of credit, or at a minimum establishing the criteria of loans they wanted to buy)and as I’ve set before, true banks were acquired or out of biz if they did not follow suit – particularly if they were publicly traded – no stock buyers, no bank. If you want to do home loans, you should be subject to the same regulations as bank.
A very informative article concerning the legal implications created by bundling mortgages into CMOs, slicing and selling as securities “insured” by credit default swaps. The article references a recent Kansas supreme court ruling which states…”The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note.”
In short, you gotta have both documents – and creation of CMOs separated them. Here’s the patrick.net link to the full article in OpEDNews.com
http://www.opednews.com/articles/LANDMARK-DECISION-PROMISES-by-Ellen-Brown-090921-894.html?ref=patrick.net
hed asplode!
This is total BS, and has been dubunked elsewhere.
Cap…Works:
Are you saying the Kansas supreme court did not make this ruling?
He’s saying that your are misinterpreting it. Paperwork gets misplaced all the time, there are ways around it. The borrower did sign the loan docs and cash the check right?
However, I fully expect to see some kind of legislation regarding mortgage holders who do not foreclose when there is a default.
There might be some maximum time in which they have to take action. There are a number of statutes of limitations in CA which run for 3-5 years. That sounds good to me. If someone has been in default for that long and you don’t file a NOD or NOS, there should some serious reduction in what can be collected. I’m thinking that smaller loans and helocs just get wiped out, and that larger ones could get a very large haircut.
While trying to buy raw land, I ran across several properties which apparently had outstanding loans which had been in default for 5-20 years without a foreclosure.
As time goes on, a picture is emerging that I don’t like, regarding real change and law enforcement to the finance industry and their executives, so far people have keep suffering, some because their own mistakes when over leveraged themselves, others are totally innocent, but I have seen very little happening in Wall Street and they are fighting with everything to preserve the status quo, like all blocking the creation of a consumer financial protection agency, again the strong guy wins over the little guy.
The nation is finding it difficult to recover from one of the deepest downturns of the housing market so far. Despite federal efforts to bail out the situation, the market is not showing very bright signs of easing. I think, with high job losses, house owners are unable to pay back the loans which they thought they would repay through their fat pay checks every month. Foreclosure rates rise with unemployment levels as many homeowners are also affected if they are not able to earn money for long periods of time. Read an interesting article on this subject.
http://www.housingnewslive.com/us-housing-news-articles.php