Would it be possible to set up a real-estate LLC that would buy/improve/heloc/flip the $h—out of properties?  Would heloc debt run up & defaulted by an LLC impair the credit of the owner of the corp?  Is the CEO of WCI have a terrible credit rating because WCI has gone bankrupt?  I think this is an abuse of the idea of a corporation, but seems to be going on a lot - Merrill handing out bonuses before announcing $15B losses…

Excellent chart indicating just how enormous the home ATM was in boosting the GDP.  I’d like to see what the numbers are just for Orange County ... that would be ultra-ugly.

I took my son to that same El Torrito Grill 3 weeks ago, and it was still open, but there were only about 4 tables occupied.

I for one, do not feel comfortable looking around Orange County and seeing all the damage from this Ponzi scheme.  I for one will be glad when it’s over.

Irvine Renter-

You are so right!  I visit the OC often and I could never figure out how so many people could afford such expensive toys (fancy cars, fancy clothes, fancy restaurants, etc.).  I live within my means and simply cannot afford some of those things.  Also, I have saved some dough for hard times, which I am going through now.  I had no idea that people who were buying all this stuff were simply pulling money out of their homes. 

Someone should write a book about this…on the level of “The Great Gatsby” or “Brideshead Revisited” about the high living during this just ended gilded age.

“There is only one real reason anyone is buying right now”

You correct yourself soon after that, but still, you’re veering close to the CNBC practice of reading every market participants’ mind flawlessly on an instantaneous basis.  Some folks have enough cash such that the couple hundred grand in prospective equity loss in a purchase isn’t that big a deal.  Very rare these days, but they exist. 

Don’t forget, it is a double whammy - not just the end of MEW, but the degree to which folks’ work incomes depended on real estate appreciation, especially in Irvine.  I’m sure it isn’t a stretch to imagine that a good 250K people in south OC have seen a loss of a job (or a majority of hours) as a result of the softer RE market , and they’re the ones no longer dropping $100 bucks on a day trip to the mall and lovely chain restaurant therein.

“The logical adult in me recognizes that this money was not free. These people are paying with lowered credit scores, the emotional fallout of losing their homes, and most difficult of all, the adjustment to a lifestyle not fueled by free-money spending.”

IR, I think it depends on how people used their free money.  Did they use it on their kids college education and now their kids have zero debt?  Did they buy a car with 100% HELOCed cash, and now they do not have a car payment?  The plastic consumerism of Orange County is dead, most abusers will feel that pain.  We will all live through that pain on some level, in terms of quality of life.  The credit bubble gave us all a false perception on what a house and average life style should look like.

The way I see it is there are 4 general types of bubble participants:

1.  Those who participated and spent all the bubble equity.
2.  Those who participated near the end and are holding the bag.
3.  Those who participated, sold at or around the peak, and are cash wealthy.
4.  Those who did not participate.

I would like to see a post on type # 3.  This would likely include some flippers who might have been holding the bag at the end, but turned over so many properties they are still cash wealthy.  Our GDP has been fueled by bubble cash for over 10 years now.  The first half of your bar chart is the tech bubble.  You could do a similar chart that illustrates what GDP would be without the Tech Bubble.

It is possible to set up a corporation or LLC to flip properties. The difficult part is finding a lender to give you a loan without signing a personal guarantee. Once you have personally guaranteed the loan, the entity you have formed does not matter.

When you think about the subprime industry, the entire industry was based on the idea you described. They wrote a bunch of loans, made a ton of money, and left the liability for losses in a compartmentalized shell corporation. In short, they took the money and ran.

Many of us remember after Sept 11, the surge in Orange County of new German Auto’s and large SUVs.  Gosh, it was like everyone was hellbent on buying something very expensive.  It was literally a week after 9-11 that ford announced 0% interest for 5 years (free money), with GM following a few days later.  According to GW Bush, we had to get America spending again, and the way to accomplish is was securitized debt.  Passing the buck from one to another, ultimately ending up in the lap of a bag holder, believing it’s AAA paper.  8)

What a sham!

The Jump-n-Jammin place is still hoppin’

Funny that you should mention that. I am no novelist, and a great novel could certainly be written about this era, but I am contemplating writing another book.

When I wrote The Great Housing Bubble, I did not put any IHB posts because I was concerned about copyright. I am no longer worried about that. I may (probably will) write a book titled House Spenders: Mortgage Fraud, HELOC Abuse, and other Cautionary Tales from The Great Housing Bubble. I would use the fraud and HELOC abuse posts as case studies on all the personal Ponzi Schemes that were hatched within the massive economic Ponzi Scheme.

You are right.  The money is not free.
Many folks who understand say, “Our children will be paying for our greed.”  And they are correct.

It is not some esoteric and nebulous concept.  Our children will literally be paying for all the money that has been borrowed and is being borrowed at an even greater rate now.  Yes, more is being borrowed faster than the last few years.  Now it is being borrowed by the treasury and soon the Federal Reserve instead of the public, hedge funds, and public corporations.

But, one way on another, most likely by currency devaluation, our children will pay for our sins and our greed.

mav @ 7:51

Your first group, those that took the loot and spent it have to be the largest part of the pie.

Sure, some got out loaded with dough thanks to the false appreciation, but those were the lucky ones. Something prevented them from the ‘trade up’ syndrome; they just didn’t buy their next big lotto ticket before the whole scam started to unravel.

Yes, I took my son there while my wife went to the mall across the road. It was a zoo. I guess people still have $10 to let their kids play…

The mortgage equity withdrawal days are coming to an end.  This madness couldn’t go on forever.  I got into plenty of arguments with my ex-wife about how a big percentage of the wealth in OC is just a facade.  It took a few years, but it looks like I was right.

I always asked myself how people in OC could afford these nice houses, luxury SUVs (with the fancy wheels), big families, the latest clothing and acessories.  All this on one real estate related income.  I guess we all know the answer now…it was all make believe.

I think the responsible people of this world will be rewarded in the next few years…I’m hoping.

Obviously this homeowner did not spend the money renovating that kitchen or those bathrooms. They likely look just like they did when the unit was built in 1984. After looking at the furniture they don’t look like someone spending money on fancy furniture or electronics.

I don’t know if that is a fair value for that place but for the asking price I think I would have expected a kitchen a little nicer. Not too much because it isn’t that type of property, but at least a little fresher.

I have felt the same envy up here in the SF area, even though we own a home. Over the last eight years, while my husband and I struggled with a bout of unemployment due to the tech bubble and outsourcing, we watched while everyone else appeared to be partying in high style. While we did boring things like pay our mortgage and give up vacations, we watched others living “Lifestyles of the rich and famous”. I said to my husband, “Where are they getting all this money? Is everyone getting paid more that us? Who can afford all these $1,000,000+ homes? Did we miss the memo?” Then, when I figure it out, I snarkily suggested that we could get that ocean front vacation home I’d always longed for for nothing down, and easily make a few millions just for enjoying it a few years.

Yes, some people did that. And yes, by not using our home as a personal ATM we often felt like complete suckers, and were at times envious. But just like you, we stuck to fundamentals, and reality. Now that the party is over we are in good shape. I am waiting to see who around us can say the same.

And that vacation property? I am watching the prices go down. All the high-rollers and flippers are trying to unload it now. Good luck with that, folks.

Love this blog, and read it every day! It helps me cope with lingering envy, and reconfirms the wisdom of how I have chosen to live my life. FWIW, my economic principles were instilled in me by my mom, whose family lost everything in the Great Depression by buying things on margin. Needless to say, I was taught a horror of leveraged debt, and the lesson that it can implode in a bubble. Very useful.

IR,

Is 2nd edition of The Great Housing Bubble conceived yet?

If not, when might it be?

“Sinks and Faucets in the bathroom” - what a deal! “Dishwasher and faucet in the kitchen” - oh my! They forgot to mention “Roof over your head”...

This is still about $100,000 too high…

Dano

If the child got a degree in Medicine, Nursing, Engineering, or Computer Science, perhaps MEW is not a bad thing.  But if the child got a degree and is now working at Starbucks, well…

I will probably hold off until 2011 or 2012. I think the update would work best if it has the perspective of being written after the market bottoms.

i work right off crown valley pkwy. i know what you are talking about. our company just cut 25% head count last week.

the only places you don’t see much signs of recession are asian shopping centers.

I would be all over that book.  I bought your first book, but my favorite part of this site is the fraud and HELOC abuse.

You are right.  But that child still had an advantage over the child working next to him/her at Starbucks with $50,000+ in student loans.  The tuition bubble is/was one of the great ponzi schemes.

So what happens to lending when <u>everyone</u> has bad credit scores?
I fear subprime will come back, but with another name: Recovery lending.
Recovery lending will help those poor poor souls who lost everything to the bad bad wall street people, and their credit scores took the hit as a result.

The banks arent lending to enough people, and its stagnating the economy. We need to help these hundreds of thousands of people who have bad credit scores, so that lending can return to normalcy and bring back the economy!

I went to the District in Tustin. It was packed on weekdays and also on weekends. Is this because it is new ? Perhaps.

For whatever reason, the mall and 5 Fwy/Crown Valley has had trouble keeping tenents. The restaurants keeping changing. I think the parking is too tough at this mall and that has a lot to do with lack of traffic in the mall.

Also, when you see in the news 50K job cuts in one day, you hunker down and keep the cash.  That’s another reason people aren’t spending. No one can be sure about keeping their job.

I noticed a couple weeks ago that The District suffered a casualty despite the apparent booming growth it’s experiencing.  Near Whole Foods there used to be a high-end baby/toddler clothing store.  That space is now empty.

I’d like to modify that….“My children will be paying for someone else’s greed.”  Which is infuriating.  Thanks to our gutless politicians, as usual, somebody else gets stuck with the check and the irresponsible parties get off for free. 

You know, Hank Paulson is pretty quiet these days.  He really faded away into the shadows after he gave those billions to his Wall Street buddies.  Wonder what his payback was.

I saw this pattern a few times in houses I looked at.  Even more surprising was how often this occurred with raw land. 

There were a pair of LLCs run by the same people who were trying to get permits and/or resell some large nondivisible plots.  Most of them had nice views, would require long driveways and utility runs.  They still wanted more than peak prices for them.

The prices dropped a little right before the bank took them.  Like so many other land listings, the website and price for the land were still up months after the bank took the properties.

Despite their nice views, these plots might get quite close to zero in value.  Nearby completed homes cost less than would be required to build new ones (const cost + land).  Because of the grading, driveways, and utilities, if home prices drop much further, it might not make sense to build if that land was free.

Irvine Renter, I am a regular blog reader and I often see lots of speculation about how HELOC borrowers spend frivolously.  From looking around at Fletcher Jones and the many mega malls here in the OC, there’s no doubt in my mind a lot of people did this.  But… do we think there are many who borrowed from their HELOC and who didn’t spend or consume this money?  I am one of those individuals.  I borrowed from my HELOC to take on additional investments that have worked out quite well for me and I have no regrets on this.  My net worth (assets - liabilities) has improved because of this, even though a glance at my HELOC would look like I sipped the kool aid.  Do you think many others are like me?  Am I a rare breed?  Simply wanted to throw this out there as perhaps there are more responsible HELOC borrowers out there.  (Granted, I’m a non-native SoCaler, so perhaps I bring different values with me.)

Many of the people in that first group really thought they were “investing” when they bought a second home or put in granite countertops.

Mattman, I believe there are a significant group of people like you.  I was not part of this group in the housing bubble, but I was part of this group in the multitude of other asset bubbles over the past 10 years.  Ignoring this group is a mistake.  It has a huge impact going forward in supporting certain premium market segments and is a driver for future asset bubbles or industrial bubbles.

I can’t imagine too many people borrowed against their homes to gamble with risky investments that pay better than the cost of the loan.  Sure it payed off for you, but I can’t imagine this is considered a wise investment strategy. 

I have a question for you:  Do you plan to pay back your HELOC?  Or did you borrow enough that you can just walk away, let ‘em have your house, and still make out OK.

You are missing the point, it’s a win-win option.  You don’t need to commit one way or the other.  Either choice can be beneficial financially.  You just need to spend the free resources wisely.

You make a good point about risk factor; I personally felt this was “cheap” money since interest paid borrowing from a HELOC often can be deducted on taxes thus making the effective interest rate not too high.  In my personal situation, I do plan to repay the HELOC and absolutely have no plans of sticking it to the bank.  Though, in general - I imagine others are not like me and do plan to stick it to the bank.  Or, perhaps their original intention was to borrow and make a ton of money; then that plan failed, perhaps those people would choose to walk away from the home.

“but you will not find a home as meticulously maintained and with as many upgrades as this home -at this price!!”

Sorry but *meticulous* has no price in this economy (i.e. worthless).

Until it bottoms?  You won’t be able to afford me by then for your art!! LOL.

*Everything* that you do with the money is considered *risk*. Even buying non-discretionary items such as food with HELOC is considered risk. This is the problem facing America today: people don’t realize the risk they’re taking.

My first paragraph may sound stupid but if you think hard at the dollars that flow in and out of your family every single day, perform a statistical analysis of that flow, and you’ll see that, unless you’ve included as much potential risks as possible (i.e. getting hit by something such that you’re gonna be hospitalized for awhile), your net worth, current cash, DTE, LTV, whatever ratio is subject to risk in the future.

HELOC is just another tool to leverage. By doing that, you’re simply extending your balance sheet (increasing asset and liability at the same time). Right now we’re experiencing the greatest balance sheet reduction since the GD (perhaps I’m wrong in this sentence) but you’re gonna see this evidence further in the coming months and years. Count on it.

http://www.fbi.gov/hq/mortgage_fraud.htm

If you want to read about fraud I’ve been watching a much larger scale for a some time now—it’s all over as well.

I am sure many who took out Heloc’s thought their house would never fall in price they felt Rich. If they bought their house in 1997 or earlier they saw a typical 300k house go over 1 million. The entire middle class now felt rich—so they bought things that would make them feel good.

And everything went up in the wake—going out to eat here is expensive compare to many other states. When I go back to South Fla. I am amazed to see cheap drinks, food prices.

The main problem with Ca is very few who were born here have lived somewhere else because of prop. 9 they don’t move. So they do not understand that their is better quality of living, better life in other states. Even a warmer ocean in Fla.

I have lived all over and the quality of life here besides the weather I feel is really poor. How many real friends do people have here? How many have neighborhood parties? People are so obsessed with money but it does not produce happiness.

And the key to happiness for some of us is hard to find because we want that little home with the garden and yard big enough for a pool, a driveway where you can actually fit you car in, real plants and yard.

What we really want is not to be burden with our home and here in CA your house is your burden. It’s your chain around your leg because of the costs. It’s keeps you chained as well because if you want to move up you will pay more in taxes.

The bubble mentality of CA is not going to change no one learns from their mistakes and it takes years to see new behavior.

For those of us who played the right game we are paying for it with lower % in interest, higher taxes, and fear we somehow missed making big money. 

For those who got caught they either have a pit in their stomach or do not allow it to bother them. But losing your credit will hurt at some point in time. I for one love my credit cards the freedom it gives me. I would not want to lose my credit.

All we can do now is hope and pray we do not lose our jobs, we pay down our debt, spend less, hope we can stay in our rentals/homes and hang onto our marriages (the stress can do much damage for some) and know Karma always gets you.

Trust me it does.

My question to everyone is, when is a good time to buy? I have wanted to to buy a home for two years now but decided not to given the inflated prices. Now that prices have come down by approximately 15%-20% in Irvine, I have been advised by many people that this year is the time to buy.  However after reading this blog, I am torn. Have we not hit the bottom yet? Although I know I can afford buying a home right now, I am still worried that we have not hit the bottom and that my down payment will be lost. Any advice would be appreciated. Thanks!

Ya, my brother in law went 130k into debt for a Psych degree from UCLA…  OUCH.

WAY too many folks going to college these days.

No, it’s the modern version of Street Car Named Desire.

“I have always depended on the kindness of strangers.”

I have some occasional envy for the HELOC abusers, but not much.  My wife and I spent what we wanted to for the most part, and what we wanted to spend was within our means.

The emotion I do feel is some anger… We played it conservatively, lived in a modest house, paid off our mortgage, had diversified investments.  But we still have gotten hit hard by the wankers in CA/NV/AZ/FL who partied like there was no tomorrow.

I guess some of my investment losses are just due to the market dropping back to what it should have been without the artificial HELOC boost to the economy.  And we are well positioned to benefit when the economy eventually bounces back.  But given the amount of damage OC and other similar areas have done to the economy, I think it is going to take a long time to recover.

I attended a BIA function last night. Chris Thornberg from Beacon Economics addressed the gathering. He is predicting a 32% decline from today’s prices in Orange County. It is not over yet.

One of the big questions I have is:

What percentage of wealth that was extracted from the housing bubble went into shorting the entire equities market?

Perhaps in 10 years we will be able to see a bar chart from the fed that shows GDP with and without a “green” energy bubble.

“Some folks have enough cash such that the couple hundred grand in prospective equity loss in a purchase isn’t that big a deal.”

Exactly who are you talking about?

I know millionaires who became that way simply because of making the right business decisions, not the wrong ones. None of them would view a 6 figure loss as no big deal.

I am struggling with this question myself since we have another baby on the way and need more room.  My conclusion from the data I look at (primarily from this blog) is that prices may have come down 15% to 20%, but this decline is from the artificially inflated peak…not from a realistic level that that represents what I consider a “fair” value.  I’d like to see prices decline closer to their pre-bubble levels before I jump back in.  I’m not sure if this will happen in the areas where I would like to live, but I am pretty sure that prices will not go UP for quite a while. 

If we fall in love with a house and feel that the price is reasonable for us then we will probably buy since we plan to be long term owners and are less concerned with timing the bottom vs. finding a home that we will enjoy.

That is exactly the point.  Just because a property that last sold for $900k is now listed for $650k doesn’t mean it won’t go down to a fundamental-attached value such as $400k over the next few years.  I will rent until the 3BR/3BA 2,200 sq ft home that I desire is available for $400k.  When I said this at a focus group two years ago everyone in the room (and probably the folks behind the mirror as well) laughed at me uproariously.  It is amazing how many of those people who have suffered so much over the last two years still don’t think that it is going to happen.  In the meantime I wait and rent.

Irvine is a market below Laguna Beach, Corona Del Mar, Newport Coast, and Newport Beach.  However it it’s premium status is above most other areas.  Prices will drop but I believe it’s debatable as to how much.  I would not apply a 32% blanket statement made on Orange County as a whole… that’s dangerous.

The best example I can give of a premium market where bubble prices will be maintained is in college tuition.  I believe indisputably that tuition bubbles at institutions like Yale, Harvard, and Princeton will be maintained.  They will be supported by wealth extracted from the myriad of bubbles over the past 10 years.  Other less desirable institutions who benefited from a tuition bubble will likely see their tuition revenue decline.

another way people (esp realtors) made money was to pretend they lived in a home for 2 years so they could sell without paying capital gains. my mom lives in woodbridge and a realtor owned the home next door. she used to visit periodically to turn lights on and off so she could have a utility bill that “proved” she really lived there.

of course, this is illegal. it’s called tax evasion. i doubt she was ever caught. and i doubt it was an isolated incident. she later sold the property, of course, as the listing agent.

Someone had to vote the gutless politicians into office.  And my guess is that it is the same irresponsible people who think the government should be bailing them or anybody else out.

Why am I thinking that my children will also have to pay for many other people’s children?

You can turn her in to the IRS and possibly collect a reward.

I had nothing to do with luck.  Unless you are talking about the type of luck that is 95% planning, work, and guts.

“It” had nothing to ...

edit

Trying to get in and out of there is awful.  We live in South County and I will do just about anything to avoid the 5 / Crown Valley Pkwy mess.

I believe the IRS offers (or at least used to offer) a bounty of x% of whatever amount is collected from tax cheats that are turned in.

Congratulations Mattman on your leverage success.  I tend to think there are many more failures than successes at trying to leverage one’s home into other investments.  My personal strategy is to only lever appreciating assets and never to lever depreciating assets.

I noticed that as well last time I was in Southern California (this summer).  For a humble person from flyover country, the price of the cars people drive is immediately recognizable.

For fools like me, the easiest and surest way to see the bottom is to look in the rear view mirror.  In other words, wait until re prices are rising and you will know the bottom has passed.  I am not being sarcastic.  You do not need to buy at the absolute bottom.  You just need to know that you will not lose another 20%.

Your “premium” college analogy makes a lot of sense!  You could argue that the best “value” education is achieved somewhere other than these premium schools; however there is a percentage of the population that looks above “value” when making their decision. 

In my opinion homes in Harbor View in Newport or homes in Turtle Rock in Irvine may continue to command a significant premium to other areas because they may be viewed as “premium” more desirable areas.  I’d love to see these areas drop another 32% but I don’t think it is going to happen.  Similar to the situation with expensive colleges, the wealthier folks may decide that these areas are where they want to spend their money….

Chris Thornberg is a raving lunatic optimist.

HA!  That Jumpin Jammin place is a zoo on acid.  Perfect for my little monster, er, I mean princess.

I always knew that Kaleidoscope Mall would come crashing down.  Every time I drove past there I couldn’t help but notice a couple stores:  Versachee (correct spelling) and Ego Salon.  Oh the hatred I have for the pompous assholes that came up with those names and even greater hatred for people that were fooled by it.  Looks like not enough people were fooled.

My wife and I have had sushi lunch at Riptide a few times in the last month or so and it’s always dead as hell in there.  She saw a painting at the gallery next door that was a “must have” (God help me) and I told her, “Just wait a few months.  It’ll be 50% off.”

IR, fantastic call on The End yesterday.  Honestly, that song has been going through my head everytime I read the daily posts.

You know what is sad. Some of those people who bought stuff just to be buying stuff or to keep up with their neighbors and subsequently lost their houses quite possibly didn’t take everything when they were foreclosed on.  They possibly left thousands of dollars of clothes, furniture, electronics, etc. behind because they couldn’t organize fast enough and could only fit so much in their car.

“I think the responsible people of this world will be rewarded in the next few years…I’m hoping.”

This reminds me of Alexander Pope’s beatitude: “Happy is he who has no expectations, for he will never be disappointed!”

Is this bubble intentionally been created? And who create this bubble? Who benefit this the most maybe is the answer.
With this bubble, GB will lose Ohio and won’t be re-elected and AG won’t re-nominated with his last term as Fed chair.

Good point about the tuition bubble. Lately I’ve been thinking about going back to college for another degree. It’s a private university so I have thought maybe I can try negotiating tuition with them as you would negotiate any other big purchase. Hmm… maybe it’s worth a try.

Strange, we went to the El Torito Grill near Fashion Island and it was packed!  Maybe it was because of the Sunday champagne brunch but I expected it to be dead too.

Hey, thanks for posting this. Nice post! Good luck

I’ve been working at a boring utility for 10 years saving $ and watched all these r/e-mortgage types make all this fast $ the past few years…but now they’re calling me looking for employment…and it kind of bugs me…

Two great examples:

My neighbor worked for some lender and moved to Vegas when they opened a new office…they shut down and now she’s back (unemployed) in her small condo with her new r/e investor husband who supposedly owns $1M condos in Miami.  Whatever.

One mother at our daycare lost her job at some r/e company and talked to my wife to see if I could get her a job…blah blah blah…so to make the wife happy I take her call and I swear I couldn’t understand what in the hell she did at this place…claimed to be a project manager but sounded like she just shuffled loans thru their system…and she wanted some high-paying job like she had that took me 10 yrs to get here…whatever…maybe you should set the bar lower since you have no job skills…told her to go online and apply to something entry level.  Anyway, and these people sounded like they were living it up in Turtle Rock…like I’m going to help you sustain your lifestyle there…

Do I sound too bitter?  Maybe I need some therapy….lol

Hey, thanks for posting this. Nice post! Good luck. A house is the largest asset you may ever own. LOL. One way to put more money in your pocket is to tap into the equity you’ve built in your home and do a “cash-out” refinancing.

They won’t get $350k for this place.  You are right, those are the original cabinets.

The new Asian-themed Diamond Jamboree shopping center in Irvine seems very popular…I want to check it out.

We live near The District and it has stayed pretty busy even during these lean times.  It might be because it’s new or that it has some decent entertainment venues.

I have noticed the Lowe’s has been pretty dead though.  Went in there on a Saturday a couple weeks ago and it felt like I was the only human inside.

Holy Sh#@!!!!

You might be waiting for a while.  I’m no bull, but many “premium” places will never hit rental parity.  Take Manhattan Beach for instance, that place has been overpriced for years, that’s why everyone rents.

so they cleaned the tile. Big deal. Looks good in that classic ‘85 kitchen.

How does “LOL” follow “A house is the largest asset you may ever own”?  If that’s a typical attitude, I can see how we got into this mess.  Nice spam!  Good luck.

That’s interesting about the bogus Short Sale flag on Redfin.  I wonder how that got there, if it’s not true.  Almost all the affordable properties my searches have been turning up on Redfin (still none in desirable areas, alas) have been marked as Short Sales—I wonder how many actually aren’t.

Note that the map shows this townhouse in completely the wrong place—in the Culver Plaza shopping center, actually.  None of the mapping services has ever bothered to properly calibrate the location of the addresses on Deerfield.

“Exactly who are you talking about?”

The 40 folks who bought in Santa Barbara in December, for starters.

“...all the HELOC abusers who got to spend this free money.”

I remember the disbelief I had as I saw a billboard years ago that said, “There’s a boat in your bedroom”. I had trouble fathoming this but soon found out that nobody with a house had any trouble connecting the dots.

I agree with IR analysis and feeling except for the conclusion that the HELOC abuse is out of money.  The good HELCO abuser took out all equity at the high, pocketed the money and still have the money in the bank and in toys. (Tax-free income)
The people that are paying are the working stiffs and the people who purchased at the high or near high with large down payments.
No need to get too upset because that life and the way things have been for thousands of years.
I missed out on the HELCO party, but I’m
health and able to sleep at night.

It really does seem like Asian shopping centers are not hurting.  Maybe it’s the low cost shopping approach and buy only what you need and can afford mentally, coupled with saving for a rainy day. 

I also noticed that the produce is fresher and low priced.

5th type:
5.  Bought before the high. Refinanced at the high to remove almost all equality or with negative amortization.  Loss the house, but have lots of cash from the refin.  Non-recourse loan without equality was used as a “stop loss” if price when down.  Better than sell, if the price when up.  Better stocks because the owner can loss any of his own money.

The difference between you and other helco’s who borrowed money is that you used it to make money not spend in on asset with none to little real return.
And I am sure your intentions were to repay the loan.
Different animal that is all—but not rare breed.
When interest rates were higher than borrowing costs many did this along the time when we had a bull market. Rotation of money is what it is really called.

when you no longer hear of layoffs, see interest rates start to go back up, inventory levels have been sold off, see new building activity, demand has returned with limited supply—-that is when we have hit bottom—

I would say we have a long way to go—-

Research firm RealtyTrac says 850,000 foreclosed homes are already on the market and expects this number to rise by another 1 million homes in 2009, with 2 million more homes entering the foreclosure process during the same period.

http://news.yahoo.com/s/nm/20090127/ts_nm/us_usa_fed_foreclosure

Did anyone see this article?

http://news.yahoo.com/s/nm/20090127/ts_nm/us_usa_fed_foreclosure

Is Barney Frank as big of an idiot as he seems?

Thought you all might want to know that the Bristol farms in the Kaleidoscope is closing down too.  Heard one of the employees there talking about it last week.  Looks like it is going to be a ghost center soon.

Drink another durty-kurty and all will be fine…

“I’ve been working at a boring utility for 10 years…”

And if you’re any kind of sensible, you’ll hope it stays boring.

“Non-recourse loan without equality was used as a “stop loss” if price when down.”

But (I’m pretty sure that) refinances are recourse in most jurisdictions.  Admittedly a judicial foreclosure is required to get a deficiency judgement but the bank will do it, if they think the judgement income will exceed the extra cost of getting the judgement.

I’m not sure I get what’s so “sad” about that. The stuff they bought was with “free money” that isn’t really theirs, since they can’t and won’t repay it anyway.

People around here seem to be selling their stuff on Craigslist. There are so many top-of-the-line treadmills and gyms for sale it’s ridiculous.

What is sad to me is that so many people “bought stuff just to be buying stuff”, and ended up with nothing but cheap crap, out on the street.

As I said to my husband over and over, the smart folks got their money, and have it socked away in gold bars in Swiss bank accounts. If I were dishonest, that’s what I would have done, with actually no risk to me: take out the money, and walk away. But that’s me. I saw the opportunity, my husband and I both knew when the market was peaking, and decided to just stay in our home to raise our family. Besides, we have to live with ourselves. Sigh.

One reason I like this blog is that it’s really nice to read someone else who is living in exactly the same reality as me. There has been such a disconnect for years.

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