Reader DM sends this along: $829,000, down from $999,000. Yeah, it backs up to a grave yard, but that also means quiet neighbors. Maybe bid $650 and see where you go?
Daily Archives: August 20, 2010
From reader “Bobby”
If you are sitting next to someone who irritates you on a plane or train follow these instructions:
1. Quietly and calmly open up your laptop case.
2. Remove your laptop.
3. Start up
4. Make sure the guy who is annoying you, can see the screen.
5. Close your eyes and tilt your head up to the sky.
7. Then hit this link: http://www.thecleverest.com/countdown.swf
Oklahoma bomber’s suit demanding organic food dismissed by judge. Thank God he’s not serving his life sentence in California – the Ninth Circuit would have granted him relief. As it is, it’s sos for him and his fellow prisoners. Hope he chokes.
I just found this site - A Mr. Eric Englund called the real estate collapse in 2006. He was ahead of me, and just about everyone else. Check it out.
In reading over the testimony, prepared by each expert, it is clear that there is concern that some regions of the U.S. have experienced unsustainable real estate price escalations. As a result, there is a danger that homebuyers in such regions may have overpaid for houses and condos. Should a significant pullback occur, in these once-hot housing markets, homeowners will suffer the consequences of owing more money than their houses are worth (i.e. being upside down).
To compound this problem, mortgage lending has been reckless, with homebuyers commonly purchasing homes using exotic mortgages such as adjustable rate mortgages (ARM), interest only mortgages, and option ARMs. With over $3 trillion in ARMs set to adjust in the next 12 months, there is a degree of nervousness amongst these experts as to how well homeowners will weather the storm of higher monthly mortgage payments. The consensus, nonetheless, is that the slowdown in the housing market will not stop the juggernaut that is the United States’ economy – even if a higher rate of mortgage defaults materializes. Such a conclusion demonstrates that dream-interpretation is a key component of today’s mainstream economic analysis.
A glaring problem, with this expert-testimony, pertains to a complete lack of understanding as to how the housing boom emerged in the first place. A healthy boom must be engendered by an accumulation of savings. Considering that there is a negative savings rate in the U.S., America’s housing boom has been driven by easy credit as engineered by the Federal Reserve’s monetary central planning – this is why the housing boom is more properly deemed a bubble. And, of course, a credit-induced boom invariably leads to a bust. For true enlightenment, I would suggest that these panelists read The Austrian Theory of the Trade Cycle.
It is also interesting that the panelists focused on the matter of house-price appreciation and how certain states saw more of this phenomenon than others. Hence, it is commonly asserted that all housing booms are strictly “local.” Panelists, predictably, expressed worries about the “overheated” housing markets in Arizona, California, Florida, Maryland, Nevada, and Virginia. Real estate speculators, indeed, did enter these markets looking to “flip” houses and condos in order to make a quick buck. This denotes, sure enough, that lenders were shoveling money out the door to all comers looking for a mortgage loan – be it speculators, permanent residents, or buyers of second homes.
It is ultra-easy credit that has driven home prices, in many locales, to stratospheric levels. And the national media reported breathlessly, ad nauseum, as to how so many people have made a financial killing in the housing market. Even if frothy housing markets were local, real estate captured imaginations from coast to coast. Accordingly, a “bubble-mentality” emerged, on a national scale, in which Americans sought to cash in on housing – one way or another. Using this perspective, and considering that mortgage lending standards dropped to near zero countrywide, I would argue that the housing bubble truly became a national phenomenon.
So how did Americans, not living in a rapidly-appreciating housing market, cash in on the craze? First of all, regardless of where one lived, the common mantra was “you’d better buy a home today before they become too expensive.” Additionally, the talking heads on CNBC, and elsewhere, were cackling such nonsense as “housing is a can’t-miss investment for the long-run.” Is it any wonder that homeownership hit a record in the United States? To be sure, this record homeownership is a manifestation of the housing-bubble mentality. Secondly, with the assistance of banks and other lending institutions, Americans became conditioned to believe that houses were really ATMs standing at the ready to disburse funds on command. Thus, nationwide, Americans have borrowed against home equity to pay for new cars, boats, flat-screen TVs, vacations, home remodels, you name it. Houses are not only homes, but appeared to be self-filling piggy banks.
Using these two points, I disagree with the assertion that all housing bubbles are strictly local. Most assuredly, there are cities in Florida and California where house-price appreciation was surreal. Where this assertion falls apart is that the housing boom was driven by easy credit and not accumulated savings – and easy credit has been available in all 50 states. Even if real estate speculators weren’t heading to Butte, MT or Detroit, MI looking to flip houses and condos, mortgage loans were still incredibly easy to come by for even the most unqualified of borrowers. Therefore, a low-wage first-time homeowner in Detroit (with a 0%-down adjustable rate mortgage) can incur a financially ruinous level of mortgage debt just as easily as a high-wage professional in Tampa can do so by going overboard when extravagantly remodeling a home – 100% funded by an adjustable rate home equity line of credit (HELOC).
Perhaps a better way to look at this table is to understand that trillions of dollars of mortgage loans have been originated during the past five years and that there is a national housing and mortgage-debt bubble. Consequently, even without living in a hot real estate market, people everywhere could mortgage themselves into financial trouble. With seven of the top-ten foreclosure rankings attached to states with house-price-appreciation rates in the bottom half of the rankings, it seems obvious that these households would become financially tapped out earlier in this housing/borrowing craze.
Be assured that there will be a rotation in the state-by-state foreclosure rankings. As the mortgage-debt binges come to an end in California, Hawaii, Maryland, and Oregon, count on Colorado being knocked from the top of foreclosure-ranking list. Soon, over-leveraged homeowners, in these once-hot states, will experience the pain of rising mortgage payments, declining home values, and no more home equity against which to borrow. It makes sense that most of the frothiest states will rise to the top of this shameful list later in the borrowing cycle – which was set in motion by Alan Greenspan’s panicky interest rate policy culminating in a 1% Fed Funds rate in June of 2003.
If members of the Senate Committee on Banking, Housing, and Urban Affairs had any clue, they would be investigating the criminal enterprise known as the Federal Reserve – a privately owned bank legally sanctioned to counterfeit money. Since the founding of the inflation-happy Federal Reserve, in 1913, the U.S. dollar has lost over 95% of its purchasing power. Heck, during the reign of Alan Greenspan, the dollar’s value depreciated by over 40%. In the context of the housing/borrowing bubble, the Senate Committee would deduce the following:
Fiat inflation encourages consumption and debt accumulation while discouraging savings.
In order to stave off a post-9/11 recession, the Federal Reserve targeted housing as a monetary transmission mechanism – generation-low interest rates saw to that.
By targeting housing, the Federal Reserve succeeded in seeing to it that trillions of dollars were loaned into existence (via mortgage debt) and, not surprisingly, stimulating the “animal spirits” of Americans to borrow and consume as if there were no tomorrow.
With trillions of dollars of mortgage debt coming into existence in a compressed time-frame (about 5 years), some housing markets became hotter than others while Americans, from coast to coast, found ways to tap into the mortgage-lending frenzy in order to participate in the real estate party.
After deducing these important points, one would hope that our Senators would seek out information in order to paint a financial picture of the average American household. Martin Weiss, of the Safe Money Report, has done so and discovered the following: “According to Federal Reserve data, the typical American family today has a balance of only $3,800 in cash in the bank, has no retirement account whatsoever, owes $90,000 on their mortgage, and owes $2,200 in credit card debt.” In other words, due to the Federal Reserve’s harebrained monetary central planning, typical Americans have virtually no savings and are heavily mortgaged. Intelligent Senators – if any exist – would then conclude that the present-day American economy is a debt-laden house of cards built upon the sands of fiat inflation.
Ultimately, the panel of experts completely missed the point in that the housing bubble is most certainly all about debt. Whether or not a local real estate market was hot, a record number of Americans took the real-estate-debt plunge. Houses supplanted dot.com and telecom stocks as the next surefire wealth-building “investment.” Americans, now, are more deeply in debt than ever. With so little savings to fall back upon, countless American families are one paycheck away from foreclosure and financial ruin.
That’s pretty much how CNBC sums up the latest housing report, and I don’t disagree. We have $5 trillion of bad mortgages out there, and something bad’s got to happen to current owners before that debt is absorbed.
It’s always been, in my opinion, a nut-job Muslim’s attempt to stick a thumb in America’s eye and I suggest that this proves it:
He’s a Holocaust-Denying Iranian Nuke Nut, but His Money’s Still Green
The Ground Zero mosque is far from a fait accompli, reports Politico.com, which goes so far as to describe it as a “long shot”:
The Cordoba Initiative hasn’t yet begun fundraising for its $100 million goal. The group’s latest fundraising report with the state attorney general’s office, from 2008, shows exactly $18,255–not enough even for a down payment on the half of the site the group has yet to purchase.
The group also lacks even the most basic real estate essentials: no blueprint, architect, lobbyist or engineer–and now operates amid crushing negative publicity. The developers didn’t line up advance support for the project from other religious leaders in the city, who could have risen to their defense with the press.
This report in the New York Post won’t help:
The developers of the Ground Zero mosque are refusing to flat out reject cash for the project from Holocaust-denying Iranian nuke nut Mahmoud Ahmadinejad.
“I can’t comment on that” was the reply of mosque spokesman Oz Sultan yesterday when asked specifically if the fund-raising would extend to Iran and Saudi Arabia. “We’ll look at all available options within the United States to start.”
If the mosque plan is really this half-baked–it almost sounds like a mere prank–Barack Obama’s decision to throw the weight of the presidency behind it* is an appalling act of political malpractice.
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Construction workers from around the country vow not to work on O’Bummer’s mosque. And just to help her president and demonstrate her commitment to free speech, Nancy Pelosi threatens to hold hearings to discover who among the right-wing Republicans is threatening the mosque. It’ll be fun to watch a bunch of hard hats telling the Speaker to fuck off.
15 signs that the U.S. housing market is headed for a complete collapse. Bad link before – sorry.
This one acre lot, with house, just off North Street was listed at $1.750 and just sold, two months later, for $1.7 million. I suppose that’s a fair gauge of what a one-acre building lot in this are is selling for these days. Not bad, for the seller.
Paid $800,000 in 2003, asked $955,00 awhile ago dropped to $795,000, eventually, and has a contract today.
5 Dialstone, new construction once priced, stupidly, at $3.999 million, was down under $3 and is now a short sale. When I innocently suggested to the builder that his $4 million price tag was preposterous, he drove from the house, yelling and screaming. I’m sure he still believes, two years later, that his failure is all my fault. So it goes.