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Gene
climber
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Sep 19, 2008 - 02:10pm PT
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Latest and greatest from Central California:
From today's Modesto Bee:
Stanislaus County median sales prices fell to $185,000 in August. That's a one-year drop of 41.3 percent. Even more depressing, it's 53.3 percent below what homes were selling for at the building boom's December 2005 peak.
Stanislaus prices haven't been this low since the spring of 2002. Six years of appreciation have been wiped out.
Merced County homes sold for a median $150,000 in August. That's down 47 percent in one year and 60.8 percent from the December 2005 peak. Merced prices haven't been this low in seven years. Last month, 549 Merced homes were foreclosed on, costing lenders $176.6 million.
San Joaquin homes sold for a median $207,000 in August. That's down 44.1 percent in one year and 54.8 percent from the November 2005 peak. San Joaquin prices also are back to summer of 2001 levels. Last month, 1,245 San Joaquin homes were lost to foreclosure, costing lenders $467.7 million.
California as a whole isn't suffering quite as much.
The state's median home price dropped to $301,000 in August, down 35.3 percent in one year.
Bay Area home prices sold for a median $447,000, down 31.8 percent in one year.
http://www.modbee.com/local/story/435146.html
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Nefarius
Big Wall climber
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Sep 19, 2008 - 02:40pm PT
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I don't see how that's depressing, Gene. It's reality. It's a reality I've been saying everyone, especially the Central Valley, would have to face, for years now. It was inevitable and just plain common sense and basic logic.
The housing boom was manufactured and total bullshit to make a few people tons of cash. I never could understand how everyone kept thinking it would keep going and things would be fine. F*#kin' ignorant. Fresno, for example has a median family income of the low $40K's. The median cost of a house hit $315K at one point. On what planet, I ask, do those numbers add up? It was the same everywhere. Throw in Merced's and Visalia's unemployment rate, which ranks in the highest in the nation, and on and on and on...
I remember telling the CEO of my bank, three years ago that he was smoking crack, when he said he thought it would keep going or stabilize where it was. Guess what? It's not finished. Housing prices will get very close to where they were before all of this bullshit started. Why? Because that's all the economy can support. Now we're in such a mess that they may even go below the pre-boom prices. Of course, rent will skyrocket, as everyone losing their homes is flooding the rental market, not to mention good folks with good credit are now being turned away for home loans, due to everyone else's f*#k-ups, etc... Basically, lots of empty homes and a ton of demand for rentals.
Everyone who went out and got a second mortgage, or overspent on their mortgage, got what they deserved. You got an interest only loan? You should probably be shot. It just seems that for whatever reason, everyone threw common sense out the door and leveraged themselves beyond belief, with no real thought as to how they were going to pay all of that debt off. So now, every other house in my neighborhood, which is completely a middle class hood, has a Beemer or Mercedes parked in front of it, a $50k SUV next to it, a woman wearing $240 jeans with fake tits, some dumbass dude with a few ATV'ss in the garage and a for sale sign in the front yard, cause they can't make ends meet. F*#king get what they deserve.
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bluering
Trad climber
Santa Clara, Ca.
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Sep 19, 2008 - 02:45pm PT
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I don't mean to be an a-hole, but I'm kinda stoked. The wife and I were looking at homes last year or two and said, Nah, we won't be able to afford it. Especially with the boy on the way.
And then, BAM!!!
We just may be able to afford a house now. I hope interest rates don't skyrocket.
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Nefarius
Big Wall climber
somewhere without avatars.........
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Sep 19, 2008 - 03:07pm PT
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I've also never understood the infatuation with interest rates... First of all, when people started going nuts when interest rates hit 6% and they started running around trying to say that interest rates were lower than they'd ever been... Well, for one, it was a flat out lie. If you look at interest rates over the 20th century, 6% was about the average. The only reason it appeared to be otherwise was because they were so high in the 80's.
But stop and think for a minute... Would you rather buy a $100K house at 10% or a $300K house at 5%? The whole interest rates "thing" was just part of the "make us some $$$, rip off the consumer" BS.
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Gene
climber
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Sep 19, 2008 - 03:08pm PT
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Bluering,
You have every right to be stoked. It's called opportunity.
Randy,
I agree with almost all you say. I differ on apartments. One would expect this to increase apartment demand. But just like when the single family market tanked in 1990, vacancy rates are increasing and effective rents are decreasing in multi-family units. Counterintuitive, I know. If Fresno is anything like the three counties I work (Merced, Stanislaus and San Joaquin), you can’t pass an apartment complex without getting blinded by the “move-in special” banners. “Get 1 month free with a six month lease” or “$299 moves you in” - that kinda stuff.
Where are people going? Those who can move in with family or double up. Some rent from the investors/speculators buying “$300K” homes that just sold for $140K.
The income property market (apartments, commercial, industrial, etc.) is posed for a BIG time fall, especially retail. Locally, retail rents went from $1.25/SF to over $2.00 in the last 4 years. At the high rent level, folks could make it when the world was full of funny money. No one is buying those $200 jeans anymore. For the retailers that survive – and I’m mostly talking about small, local businesses - at lease renewal time they will negotiate downward or book. When the seven year call on the landlord’s loan comes up, he’ll be unable to refi. Owner loses property to bank. Bank sells cheap. Sound familiar? I’ve seen deals where tenants have been able to renegotiate $2.25/SF rent to $1.30 “temporarily.” Right!
The folks who bought those Starbucks/Quizno retail coupon clippers in the last couple of years at a 5.0% cap rate are absolutely screwed.
Should be interesting to watch.
GM
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Nefarius
Big Wall climber
somewhere without avatars.........
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Sep 19, 2008 - 03:24pm PT
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Interesting, Gene. Fresno hasn't had that effect (apt. rentals). You can't get into a one bedroom in Fresno, in a decent part of town, for less than $1K per mo now. Of course, you'll have to pay first, last and a deposit (it doesn't seem to matter that this is an illegal practice around here)too. This is compared to those same places being $600 per mo. in `03/04. And it's climbing steadily. Not too sure about commercial properties...
Fresno is just weird tho. Cow town, turned wannabe L.A.. Maybe more wannabe O.C.. Everyone wants to pretend they're rich (still buying those jeans and boobs here) and are becoming as over-fashioned, over-fake, clueless/stupid and arrogant/as#@&%e as the typical L.A. crowd. If we were going to try to emulate a big city, I'd have much preferred it to have been the Bay Area. I prefer educated people who actually know a few things about wine, food and art, culture, history and science, etc. and actually care about things like public transport, all things green, humanity, etc... You get the picture - most californians understand the distinct difference between the two regions.
Definitely agree that it will all be interesting to watch. What say we grab some beers and sit on the sidelines and hoot an holler?
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Gene
climber
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Sep 19, 2008 - 03:31pm PT
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What say we grab some beers and sit on the sidelines and hoot an holler?
That perfectly describes my recent climbing experiences, either at the Bridge or in El Cap Meadow.
There. It's a climbing topic.
GM
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overit
Trad climber
Boulder
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Sep 19, 2008 - 04:28pm PT
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"Everyone who went out and got a second mortgage, or overspent on their mortgage, got what they deserved. You got an interest only loan? You should probably be shot. It just seems that for whatever reason, everyone threw common sense out the door and leveraged themselves beyond belief, with no real thought as to how they were going to pay all of that debt off. So now, every other house in my neighborhood, which is completely a middle class hood, has a Beemer or Mercedes parked in front of it, a $50k SUV next to it, a woman wearing $240 jeans with fake tits, some dumbass dude with a few ATV'ss in the garage and a for sale sign in the front yard, cause they can't make ends meet. F*#king get what they deserve."
EXACTLY!!!!!!
AND add to that, I can't afford health insurance so the government should pay for it!
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Nefarius
Big Wall climber
somewhere without avatars.........
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Sep 19, 2008 - 05:13pm PT
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Ooooooooaaah!
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graniteclimber
Trad climber
Nowhere
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Sep 19, 2008 - 05:25pm PT
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""Everyone who went out and got a second mortgage, or overspent on their mortgage, got what they deserved. You got an interest only loan? You should probably be shot. It just seems that for whatever reason, everyone threw common sense out the door and leveraged themselves beyond belief, with no real thought as to how they were going to pay all of that debt off. So now, every other house in my neighborhood, which is completely a middle class hood, has a Beemer or Mercedes parked in front of it, a $50k SUV next to it, a woman wearing $240 jeans with fake tits, some dumbass dude with a few ATV'ss in the garage and a for sale sign in the front yard, cause they can't make ends meet. F*#king get what they deserve."
They may have gotten what they "deserve" but that's even more true of the banks and other financial institutions. So now who are the Feds bailing out?
Also, I have a bunch of garbage I bought in a garage sale. I KNEW it was garbage when I bought it but I thought I'd make money selling it to suckers on Ebay. Now no one wants to buy it! It's worthless and I'm losing money on it. Who do I call at the Federal Reserve so they can come and buy this garbage from me at taxpayer expense?
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Gene
climber
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Sep 19, 2008 - 05:29pm PT
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Call the Fake Tits Insurance Corporation.
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bluering
Trad climber
Santa Clara, Ca.
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Sep 19, 2008 - 05:31pm PT
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Granite, I hear ya, not only should some of these a-holes not get bailed out, but the exec's and board members should be investigated and possibly jailed and fined.
Damnit!!
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Nefarius
Big Wall climber
somewhere without avatars.........
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Sep 19, 2008 - 06:03pm PT
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I agree that the banks got what they deserved, as well. I also believe, however, that there is something called personal accountability. Kinda like the stupid "SuperSize Me" movie. What a biased load of sh#t that was! Just because McDonald's offers food, it doesn't mean you have to buy/eat it. And if you do, it doesn't mean you have to eat it often or over-do it when you do eat it. McDonald's had *nothing* to do with making the twins (that got the ball rolling), nor the "star" of the film, or anyone else overweight. If you're overweight, it's because you have an issue with self control when it comes to food, or (in rare cases) some sort of medical condition.
Same with banks. The banks put loans out that only an ignoramus would sign to and, well, there were just a lot more ignoramuses than they expected. Should the banks be offering those loans? Hell no. Is it the bank's fault anyone signed them? F*#k no! Learn to read a contract. Learn to think for yourself instead of expecting someone to come bail you out of everything, or thinking you can sue someone for some stupid sh#t. This is a message America needs to learn. Personal accountability.
How many people signed interest only loans? Seriously... WTF were they thinking? They weren't. When they're sitting on a curb with nothing, instead of having waited to buy the house when the time was right, or under a deal you could actually afford, they get what they deserve. When the bank approves these jokers, over and over and over, when they should have known better and they go bankrupt, they get what the deserve too. Unfortunately, that's not going to happen, because there are so many f*#ktards in this country that if we let them pay for their own mistakes, they'll take the whole ship down with them - us included.
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Patrick Sawyer
climber
Originally California now Ireland
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Sep 19, 2008 - 06:39pm PT
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While house prices in Ireland are falling (and set to do so for a while according to the pundits) they are still a lot higher than elsewhere.
We are looking at the south of France (where we have both lived and worked before), or New Zealand.
We are headed out to Croatia and Slovenia next week, so perhaps something there will catch our eye. I hope to get some bouldering in and perhaps some easy free soloing but I am taking my harness in case I can meet and tie in with some people.
Jen loves San Francisco and I miss my home state, but jaysus, the property prices. Perhaps Oregon or Washington (my dad’s home state) but I do have 1-1/4 acres in West Virginia from my mom’s estate (which I will probably sell to my cousin who bought the family farm from my mom some years ago).
There is always the possibility of a nice sailing boat, travelling and writing - and climbing.
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overit
Trad climber
Boulder
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Sep 19, 2008 - 06:58pm PT
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bluering, let me fix that for you:
"Granite, I hear ya, not only should "MOST" of these a-holes not get bailed out, but the exec's and board members should be investigated and "DEFINITELY" jailed and fined."
Damnit!!
Fraud + stupid spenders = money out of my paycheck!
Double Damitt!!!!
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Karl Baba
Trad climber
Yosemite, Ca
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Sep 19, 2008 - 08:26pm PT
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"How many people signed interest only loans? Seriously... WTF were they thinking? They weren't."
It's strange how greed or wishful thinking makes us believe what we want to believe. I had a couple friends I sat down and said "Beware, this is a bubble, the crap will hit the fan..." and they always said the same thing: "My Real Estate Agent is a professional and convinced me that Real Estate never goes down, it just levels off for a time and then continues it's upward march."
Lots of people are going to go down in flames soon and many will be bailed out or even get golden parachutes in millions of dollars.
Justice? Maybe in time with karma but don't look for it soon
Peace
Karl
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Nefarius
Big Wall climber
somewhere without avatars.........
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Sep 19, 2008 - 08:27pm PT
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Yeah, I hear ya Karl... I've heard that same line too. Sad, really. Now all of us get to pay... Even if we weren't involved in teh mistakes.
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Patrick Sawyer
climber
Originally California now Ireland
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Sep 20, 2008 - 07:54am PT
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Thanks to the politicians, the American Dream has become the American Wet Dream.
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Gene
climber
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Feb 19, 2009 - 05:12pm PT
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The worm has turned...
Stanislaus County homes are the most affordable in California, followed by Merced and San Joaquin counties, a study released this morning showed.
The new calculations show that Stanislaus's median-income families now can afford to buy 71.1 percent of homes on the market. Three years ago, just before the housing bubble burst, only 3 percent of Stanislaus homes were affordable to median-income families.
In Merced, the percentage hit 70.9 percent and in San Joaquin it is 66.4 percent.
http://www.modbee.com/local/story/605077.html
Of course, the median home price has dropped > 60%.
gm
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tooth
Mountain climber
Guam
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Feb 19, 2009 - 08:51pm PT
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If only the stupid Olympics weren't pushing prices up around Squamish... anyone have some land there for sale, cheap? My engineering/contractor buddies in BC are still really busy building.. doesn't look like the California trend has hit BC yet.
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