One of my colleagues asked me this earlier this week.
I told him it's because there are $50,000 houses on the West Side, and in Midway, and all over town.
I've just seen so many bottom-dollar houses lately. Good stuff, even, good condition. Just foreclosed, and needs to get sold. For me to see a house that is shockingly cheap I think it has to be under $50,000.
Thursday, January 24, 2008
Speaking of Suing
Really, there is this dumb myth that "You can sue anyone for anything."
No. You can't. You just can't.
I can't sue Craig Finn because he won't come to my parties. Nor can I sue the asses that broke my dad's car windows, or the jackass that had that loud party.
Sometimes you can try to sue someone without a good reason and you will fail, if a lawyer will even bother to take the case. Lots of lawyers can't or won't take them.
So please stop thinking that. Or saying that. Because it's just not true.
No. You can't. You just can't.
I can't sue Craig Finn because he won't come to my parties. Nor can I sue the asses that broke my dad's car windows, or the jackass that had that loud party.
Sometimes you can try to sue someone without a good reason and you will fail, if a lawyer will even bother to take the case. Lots of lawyers can't or won't take them.
So please stop thinking that. Or saying that. Because it's just not true.
Seriously Addicted to Marshmallows
Really, I've never loved marshmallows until this winter.
Now, I can't get enough. I told my husband I was going to get a drink when we were watching Lost last week. Came back with a mug full of hot chocolate with marshmallows, hold the hot chocolate.
I'm really trying to not eat the whole bag. We know where this is going.
The Declining Market is VERY Localized
So about a month back I applied for a HELOC (home equity line of credit).
When they ran my address through "the system" my ghetto address came back tagged as declining market and the bank wasn't too excited to give me tons of cash. It turned out okay in the end, but this declining market stuff is B.S.
So I had a buyer looking at a house one mile over and 3 blocks south of me... basically my old neighborhood. This owner is selling the house for $100k less than he bought it for in 2002. When talking to the mortgage guys about it, they checked it for declining market status: Nope! it's fine! No declining market there!
Seriously, this is such B.S.
When they ran my address through "the system" my ghetto address came back tagged as declining market and the bank wasn't too excited to give me tons of cash. It turned out okay in the end, but this declining market stuff is B.S.
So I had a buyer looking at a house one mile over and 3 blocks south of me... basically my old neighborhood. This owner is selling the house for $100k less than he bought it for in 2002. When talking to the mortgage guys about it, they checked it for declining market status: Nope! it's fine! No declining market there!
Seriously, this is such B.S.
Thursday, January 10, 2008
Let the Suing Begin
As you all know the foreclosure thing has really gotten out of hand. Foreclosures have even *gasp* hit the suburbs. Being good Americans and having a government that holds a loose grasp on business, when things get out of hand, we sue.
So the city of Baltimore has begun to sue Wells Fargo over "reverse redlining" -- a fancy way to say Wells Fargo is alleged to have given loans with the harshest terms to those in the poorest (read: blackest) neighborhoods. The city of Baltimore (as well as cities across the nation) must now deal with the fallout of having lots and lots of vacant homes to deal with. The city must inspect, maintain, and protect these homes. Sometimes they are set on fire, and there's no one to cut the lawn.
The cost to the other homeowners on the block is terrible. Lowered home prices on your block mean lower home prices for your own house -- as well as dealing with vacant houses that are never maintained and are a break in and fire risk.
Additionally, Fannie Mae and Freddie Mac (quasi-governmental agencies that buy mortgages from Wells Fargo, Countrywide, US Bank, etc.) has announced new guidelines for lending. They are saying that if you are in a declining value area you may not be able to get a 100% loan as you have in the past. The funny thing is that no one can figure out what these declining areas are. Will the correspond with the poorest neighborhoods in town? Will they also correspond with the most ethnic neighborhoods in town? Will this lead to a Baltimore-style lawsuit?
Realtors are pretty up in arms over this. We are taught to be unendingly fair in our treatment of neighborhoods, and this announcement rubbed us all the wrong way. It will be interesting to see where it leads.
So the city of Baltimore has begun to sue Wells Fargo over "reverse redlining" -- a fancy way to say Wells Fargo is alleged to have given loans with the harshest terms to those in the poorest (read: blackest) neighborhoods. The city of Baltimore (as well as cities across the nation) must now deal with the fallout of having lots and lots of vacant homes to deal with. The city must inspect, maintain, and protect these homes. Sometimes they are set on fire, and there's no one to cut the lawn.
The cost to the other homeowners on the block is terrible. Lowered home prices on your block mean lower home prices for your own house -- as well as dealing with vacant houses that are never maintained and are a break in and fire risk.
Additionally, Fannie Mae and Freddie Mac (quasi-governmental agencies that buy mortgages from Wells Fargo, Countrywide, US Bank, etc.) has announced new guidelines for lending. They are saying that if you are in a declining value area you may not be able to get a 100% loan as you have in the past. The funny thing is that no one can figure out what these declining areas are. Will the correspond with the poorest neighborhoods in town? Will they also correspond with the most ethnic neighborhoods in town? Will this lead to a Baltimore-style lawsuit?
Realtors are pretty up in arms over this. We are taught to be unendingly fair in our treatment of neighborhoods, and this announcement rubbed us all the wrong way. It will be interesting to see where it leads.
Hooray for Klondike Kate!
In a surprise move, my friend Audra tried out for AND WON the title of Klondike Kate!!
I am ridiculously thrilled for her. I can't wait to get my picture taken with her in her Kate getup.
Curiously, this is not the first Kate I have know. The very talented Kari Schaff is a past Kate and friend of a friend. Funny, I've never known any of the queens or princesses, though. I guess I am just more of a Klondike Kate kind of gal.
Photo from the Strib:
I am ridiculously thrilled for her. I can't wait to get my picture taken with her in her Kate getup.
Curiously, this is not the first Kate I have know. The very talented Kari Schaff is a past Kate and friend of a friend. Funny, I've never known any of the queens or princesses, though. I guess I am just more of a Klondike Kate kind of gal.
Photo from the Strib:
Wednesday, December 26, 2007
So I'm Super Dorky
I am seriously into financial data.
You have seen that the Case Shiller index recently published the October index results.
The Case Shiller Index is a Wall Street invention to try to track home prices. An index is kind of an artificial scorekeeping method to track things that are a little bit difficult to track. You may all know about the inflation index -- when the cost of a few goods that everyone buys goes up (milk, gas, etc.) the cost of living goes up a few points. Now, no one is taking any "points" out of your wallet for a gallon of milk, but you get the idea. They have made a similar points system for house prices -- the Case Shiller index.
To my delight, Case Shiller tracks not only national data, but metro-area data, including Minneapolis. So after shoveling out again today, I settled in with some Minneapolis area Case Shiller data. Whoo-hoo!
What I was wondering about was kind of twofold-- first off, when was the high point, and how far have we fallen from there?
Well, the high point was in mid-2006.
Prices have fallen now to about the same level as they were in early 2005.
Really, it's not as bad as I thought it would be. We've lost a few years of growth -- but the prices at the peak were SO inflated.
You have seen that the Case Shiller index recently published the October index results.
The Case Shiller Index is a Wall Street invention to try to track home prices. An index is kind of an artificial scorekeeping method to track things that are a little bit difficult to track. You may all know about the inflation index -- when the cost of a few goods that everyone buys goes up (milk, gas, etc.) the cost of living goes up a few points. Now, no one is taking any "points" out of your wallet for a gallon of milk, but you get the idea. They have made a similar points system for house prices -- the Case Shiller index.
To my delight, Case Shiller tracks not only national data, but metro-area data, including Minneapolis. So after shoveling out again today, I settled in with some Minneapolis area Case Shiller data. Whoo-hoo!
What I was wondering about was kind of twofold-- first off, when was the high point, and how far have we fallen from there?
Well, the high point was in mid-2006.
Prices have fallen now to about the same level as they were in early 2005.
Really, it's not as bad as I thought it would be. We've lost a few years of growth -- but the prices at the peak were SO inflated.
Wednesday, December 12, 2007
Realtors and Mortgage Originators Working Harder than Ever
I know, realtors and mortgage people don't have a very good reputation right now.
But the good news is that this mortgage mess and housing slowdown are doing good things to the industry.
Last year the State of MN implemented a licensing program for mortgage originators. Believe it or not, in the past, there was no requirement to have a license. Now all mortgage people need to get training, hold a license, and even have a net worth of $250k in their business. This is good news.
Already the number of people working as mortgage originators has fallen. And it has fallen a lot. So hopefully the bad eggs and the part timers are getting out of the business, leaving the work to be done by the pros.
Same thing is happening to Realtors. We are losing Realtors. There are lots of Realtors that do one or two transactions per year -- which isn't enough to cover the costs of the required continuing ed and the annual dues to the local Realtor's Association (which is required to do the job -- it gives access to the MLS).
Doing one or two transactions per year just does not allow a Realtor to stay up to date on all of the latest laws and trends in real estate.
So when the annual Realtor's Association board dues came around in November -- $398 -- about 400 Realtors decided not to renew their license.
It's just going to be harder. Harder for mortgage people and Realtors that used to make lots of "easy money" in the boom years. Clients are taking more time, and spending less, than they used to. Realtors and mortgage people will feel this in the pocketbook. And many of them will quit. Or sell their homes and Lexuses.
There are also rumors of entire real estate offices closing. I don't have good information on this yet, but you will hear it here when I know for sure.
(For the record I am still going gangbusters and am currently shirking a thousand responsibilites by writing this post.)
But the good news is that this mortgage mess and housing slowdown are doing good things to the industry.
Last year the State of MN implemented a licensing program for mortgage originators. Believe it or not, in the past, there was no requirement to have a license. Now all mortgage people need to get training, hold a license, and even have a net worth of $250k in their business. This is good news.
Already the number of people working as mortgage originators has fallen. And it has fallen a lot. So hopefully the bad eggs and the part timers are getting out of the business, leaving the work to be done by the pros.
Same thing is happening to Realtors. We are losing Realtors. There are lots of Realtors that do one or two transactions per year -- which isn't enough to cover the costs of the required continuing ed and the annual dues to the local Realtor's Association (which is required to do the job -- it gives access to the MLS).
Doing one or two transactions per year just does not allow a Realtor to stay up to date on all of the latest laws and trends in real estate.
So when the annual Realtor's Association board dues came around in November -- $398 -- about 400 Realtors decided not to renew their license.
It's just going to be harder. Harder for mortgage people and Realtors that used to make lots of "easy money" in the boom years. Clients are taking more time, and spending less, than they used to. Realtors and mortgage people will feel this in the pocketbook. And many of them will quit. Or sell their homes and Lexuses.
There are also rumors of entire real estate offices closing. I don't have good information on this yet, but you will hear it here when I know for sure.
(For the record I am still going gangbusters and am currently shirking a thousand responsibilites by writing this post.)
Fixing the Unfixable
Earlier this week the Bush "adminstration" gathered all of the nation's largest morgage providers to try to get this mess worked out. What they have come up with is to freeze SOME of the adjustable rates for SOME of the borrowers. I've read a lot of articles on this, but there is no sincle source that is showing what "the rules" of this program will be. The mortgage guy in our office read Well's Fargo's policy on it and it had some verbiage about "case to case basis."
Here's what I can gather about the program:
- You must have an ARM loan (Our Wells Fargo statement said it would only affect 3/27 and 2/23(?) loans. Most people with ARMS have the 3/1, 5/1, 7/1, etc. So you need to not just have the ARM, you need the unusual kind of ARM. The 3/27 is fixed for 3 years and then adjusts for 27 months...? I missed the exact definition at the meeting yesterday, sorry.)
- You must be able to prove you CANNOT afford the loan if it adjusts. (Sorry to all those out there that can pretty much afford the giant adjusted price! They're only giving breaks to those that are headed for Foreclosure City!!)
- You must always make your payments on time. (Even if you can barely afford the loan, if you have missed a payment, you won't get this program. You, again, are going straight to Foreclosure City!)
So, how many people will this program provide help to?
Not so many. The loan type that Wells Fargo is offering help on was sold to, I think, 1% or less of all of their loans. (I really need to take notes in our meetings. Then I would have these stats down cold!)
On top of that, of this 1% of homeowners, they must NOT have missed a payment. And, they must basically re-apply for the mortgage to prove they cannot afford the new payment. If the mortgage banker/broker was doing a good job, all of the holders of these loans should be able to afford the new adjusted payment because the mortgage broker should have checked for that. And the only people that would actually qualify are those that have much lower incomes now than they did when they applied for the loans.
So, tell me again, who does this program help?
Uh, the bank.
And, indirectly, the average consumer.
Keep in mind that the bank is only offering this re-adjustment to homeowners that are on the fast train to foreclosure. The bank is trying to avoid going through the foreclosure process with consumers that do pay their bills but are likely to default if the payment goes up.
You may think --well, jeez, wouldn't the bank rather take the property than lose all that interest money?
I would argue that they aren't losing any interest money. If the person gets foreclosed on, the bank sure as shit isn't getting a dime from the homeowner.
And-- the costs of foreclosure are high for the banks, very high. I've been showing lots of foreclosures lately and I estimate the bank loses $50k-$70k on every foreclosure....
They loaned out $200k, they spent $10k in legal fees, and sold the property for $150.
So I think this fixing the rate stuff is CYA BS.
I do sincerely hope that someone in one of these loans is helped. But it's not going to be many.
Here's what I can gather about the program:
- You must have an ARM loan (Our Wells Fargo statement said it would only affect 3/27 and 2/23(?) loans. Most people with ARMS have the 3/1, 5/1, 7/1, etc. So you need to not just have the ARM, you need the unusual kind of ARM. The 3/27 is fixed for 3 years and then adjusts for 27 months...? I missed the exact definition at the meeting yesterday, sorry.)
- You must be able to prove you CANNOT afford the loan if it adjusts. (Sorry to all those out there that can pretty much afford the giant adjusted price! They're only giving breaks to those that are headed for Foreclosure City!!)
- You must always make your payments on time. (Even if you can barely afford the loan, if you have missed a payment, you won't get this program. You, again, are going straight to Foreclosure City!)
So, how many people will this program provide help to?
Not so many. The loan type that Wells Fargo is offering help on was sold to, I think, 1% or less of all of their loans. (I really need to take notes in our meetings. Then I would have these stats down cold!)
On top of that, of this 1% of homeowners, they must NOT have missed a payment. And, they must basically re-apply for the mortgage to prove they cannot afford the new payment. If the mortgage banker/broker was doing a good job, all of the holders of these loans should be able to afford the new adjusted payment because the mortgage broker should have checked for that. And the only people that would actually qualify are those that have much lower incomes now than they did when they applied for the loans.
So, tell me again, who does this program help?
Uh, the bank.
And, indirectly, the average consumer.
Keep in mind that the bank is only offering this re-adjustment to homeowners that are on the fast train to foreclosure. The bank is trying to avoid going through the foreclosure process with consumers that do pay their bills but are likely to default if the payment goes up.
You may think --well, jeez, wouldn't the bank rather take the property than lose all that interest money?
I would argue that they aren't losing any interest money. If the person gets foreclosed on, the bank sure as shit isn't getting a dime from the homeowner.
And-- the costs of foreclosure are high for the banks, very high. I've been showing lots of foreclosures lately and I estimate the bank loses $50k-$70k on every foreclosure....
They loaned out $200k, they spent $10k in legal fees, and sold the property for $150.
So I think this fixing the rate stuff is CYA BS.
I do sincerely hope that someone in one of these loans is helped. But it's not going to be many.
Thursday, November 29, 2007
This time it's real
We now have data showing prices nationwide dipping 0.4%.
The Office of Federal Housing Enterprise Oversight has published these numbers. The 0.4% price drop is a comparison of prices in July-September 2007 vs. July-September 2008.
There's a story on the front of the Star Tribune if you want the down and dirty.
Yun, the big economist for NAR (National Association of Realtors) remains optimistic. He anticipates no more "major" price drops. Remember, he's the one that kept saying "Slow market? What slow market? The market is great!" Marketwatch has a nice article ripping Yun on this one.
But, all real estate is local.
I am seeing sellers begin to give up. Lots and lots and lots of foreclosures and pre-foreclosures. Lots of sellers will be taking their houses of the market in the next few weeks before Christmas, because it's so slow and showing your house is a hassle.
The houses that remain on the market are great bargains, for the most part. Anyone trying to sell their house this month are dead serious about selling. I think my current buyers will be getting great deals.
The condo market is pretty much desperate.
Certain neighborhoods have a lot of foreclosures, which is pushing down prices. Those that need to sell have slashed prices back to 2002 and still aren't selling.
How do we come back out of this?
Incomes needs to rise, and home prices need to remain steady.
The Office of Federal Housing Enterprise Oversight has published these numbers. The 0.4% price drop is a comparison of prices in July-September 2007 vs. July-September 2008.
There's a story on the front of the Star Tribune if you want the down and dirty.
Yun, the big economist for NAR (National Association of Realtors) remains optimistic. He anticipates no more "major" price drops. Remember, he's the one that kept saying "Slow market? What slow market? The market is great!" Marketwatch has a nice article ripping Yun on this one.
But, all real estate is local.
I am seeing sellers begin to give up. Lots and lots and lots of foreclosures and pre-foreclosures. Lots of sellers will be taking their houses of the market in the next few weeks before Christmas, because it's so slow and showing your house is a hassle.
The houses that remain on the market are great bargains, for the most part. Anyone trying to sell their house this month are dead serious about selling. I think my current buyers will be getting great deals.
The condo market is pretty much desperate.
Certain neighborhoods have a lot of foreclosures, which is pushing down prices. Those that need to sell have slashed prices back to 2002 and still aren't selling.
How do we come back out of this?
Incomes needs to rise, and home prices need to remain steady.
Subscribe to:
Posts (Atom)
