No matter who is riding inside, this is always a great sight – photo by Chris Stone:
See the rest here.
No matter who is riding inside, this is always a great sight – photo by Chris Stone:
See the rest here.
From the wsj.com:
U.S. home prices rose in July from a month earlier with a boost from seasonal demand, but were down from 2010 levels, according to the Standard & Poor’s Case-Shiller home-price indexes.
The housing market has been struggling to recover due to high unemployment, an abundance of foreclosures and tighter mortgage requirements. Home prices rose in April for the first time in eight months, though most of the improvement was believed to reflect the beginning of the spring-summer home-buying season.
“While we have now seen four consecutive months of generally increasing prices, we do know that we are still far from a sustained recovery,” said David Blitzer, chairman of S&P’s index committee. “Continued increases in home prices through the end of the year and better annual results must materialize before we can confirm a housing market recovery.”
Of the 20 major U.S. metropolitan markets, 17 reported higher prices from a month earlier, led by 3.8% growth in Detroit. Las Vegas and Phoenix saw declines of 0.2% and 0.1%, respectively. Denver was unchanged.
However, with the exception of Detroit and Washington, prices were down year-to-year.
San Diego’s seasonally-adjusted in green (CR’s preference) vs. non-seasonally adjusted in red:
In 2010, there were 19 detached sales over $1,000,000 west of the I-5 freeway in Leucadia.
(roughly the area on map page 1147A,B, and half of C)
This year, 22 have already closed, and Tyvek Estates and the Leucadia Collection are just getting started for about the same money. They should appreciate this comp, which looks pretty regular:
Hat tip to Michael for finding this youtube of the documentary done a couple of years ago by a Canadian film company about the global financial crisis.
A certain part-time blogger is featured at the 3:52-min. mark, with his concerns.
Daniel mentioned it again today and it reminded me of what happened when I sent my mother the link to Al-Jazeera TV, who has been playing the whole series lately. She thought I defected or something, and was disgraced that I was being featured on Al-Qaeda TV!
Although NAR is urging realtors to contact their congress-people to whine about how lowering the loan limits will cause the world to end, it appears that Fannie/Freddie/FHA max loan amounts will be dropping next week.
Hat tip to DS for sending this along, from Yahoo Finance:
On Oct. 1, the size of mortgages eligible for purchase by Fannie Mae and Freddie Mac will shrink. That isn’t necessarily a big deal in most parts of the country; the new lower limit of $625,500 — down from today’s $729,750 — still is big enough to cover most homes in almost all markets in the United States.
Furthermore, mortgage bankers are stepping up with new money to cover those bigger loans, reports Mortgage Daily. “Programs here and there are popping up,” says publisher Sam Garcia. He reports that some new lenders, including TMS Funding and New Penn Financial LLC, are launching programs that will make mortgages as big as $2 million available to lenders with good credit scores and enough cash to keep up with the payments. And many existing mortgage lenders currently will make those so-called “jumbo” loans and just keep them in their portfolios instead of selling them.
But those loans will cost more. Currently the difference between rates on so-called conforming loans and private-made loans is about 0.64 percent. Over the last two years that spread has been as low as 0.48 percent and higher than one percent, says Garcia.
So in some pricey places, the new limits will really pinch borrowers. Those limits vary from market to market and are determined in part by local housing prices. In expensive housing markets where prices have fallen, the limits will drop the most.
Hardest to be hit, according to a new analysis by Move.com, will be San Diego, where loans up until $697,500 qualify for Fannie and Freddie until Sept. 30. On Oct. 1, that limit drops to $546,250, a $151,250 difference.
Folks there who want to borrow a bunch for a home will see their costs rise significantly.
A San Diego homebuyer who needs $600,000 would pay $2,937 a month for a 30-year loan at today’s rate of 4.18 percent, according to Bankrate.com. Starting next month, if rates stay stable and that borrower goes to a private lender, he would pay $3,155 a month. That’s $228 more a month, or $82,080 more over 30 years.
Some buyers (and lenders) may try to get around that by piggy-backing loans; piling a smaller non-conforming loan onto a conforming loan.
Here are some other areas, most often searched on Realtor.com, that could see significant changes in their loan limits, according to the Move analysis.
From HW – with no mention of last year’s tax credit:
The Case-Shiller, a key housing price index that covers 20 U.S. metropolitan areas, likely fell 4% in July from the year-ago period, Zillow said.
The S&P/Case-Shiller 10-city index is expected to show the same month-over-month increase compared to June, while also registering a decline of 3.4% from a year earlier.
“The market is full of conflicting signals right now with August consumer confidence down by 25%, July pending homes slipping, and the four-week moving average of mortgage applications also dipping,” said Zillow Chief Economist Stan Humphries in a statement.
Humphries’ expectations for the Case-Shiller index were initially much weaker, but were bolstered recently by two indicators.
The Zillow home value index, a key factor in its Case-Shiller forecast, rose 0.12% in July, and August home sales rose 7.7%, well ahead of expectations. Still, uncertainty is plaguing the market and will exert a drag on housing, according to Humphries.
“I still believe that the continued fears about a Greek default, weak employment growth and low consumer confidence will ultimately translate into weaker housing performance in the back half of this year,” he said. “Looking ahead, expect fading monthly momentum in Case-Shiller.”
Hat tip to SM for sending this along, from Yahoo.com:
It’s no secret that Bank of America wants to put its mortgage-related woes behind it. But it appears that a key $8.5 billion settlement with large investors is playing a role in pushing many more people into foreclosures.
The number of homes across the country that received an initial default notice — the first step in the foreclosure process — jumped 33 percent in August from July, the foreclosure listing firm RealtyTrac reported last week. It was the largest monthly increase since August 2007, right after the housing bubble had burst.
Now a preliminary analysis reveals the largest escalation of foreclosures came from Bank of America. Just in California, default notices sent by Bank of America soared 96 percent in August from the previous month.
The dramatic rise is particularly evident in certain California towns and cities. For instance, notices surged 95 percent in Fresno and 76 percent in Sacramento.
Bank of America says that taking action on its foreclosure pipeline will set the stage for a housing market recovery. However, consumer advocates say Bank of America and the other lenders are ramping up foreclosures without cleaning up shoddy paperwork practices, which led to a moratorium in foreclosures last October.
“Bank of America has a ticking time bomb in its books and it needs to show investors that it is moving,” said Ira Rheingold, an attorney and executive director of the National Association of Consumer Advocates.
“‘Does that mean it has improved its practices?’ No. But Bank of America is in a desperate place,” said Rheingold.
On June 29, the Charlotte, N.C. bank struck an $8.5 billion settlement with a group of large investors– including Pimco, the New York Fed and Blackrock– who claimed the bank had sold them poor quality investments based on faulty mortgages. The settlement is still subject to court approval; a decision is expected in November. Several other investors and homeowners have also filed objections with the court to block the settlement.
Bank of America spokesman Richard Simon said the bank’s increased foreclosure actions had nothing to do with the settlement. Instead it stems mainly from a return to more timely filings on new defaults. He also noted that the bank has improved quality controls and was moving homes into foreclosure “only after all other options with homeowners have been exhausted.”
Clearing the backlog of foreclosures and defaulted loans is a key part of the terms of the settlement. Bank of America has to reduce the number of risky mortgage loans and find third-party companies that can help speed up the process. This includes helping homeowners modify loans or herding defaulted loans into foreclosure sales.
The bank’s actions to start clearing the backlog started from the date the settlement was signed, said Scott Humphries, a partner at law firm Gibbs & Bruns, which represented investors in the settlement. “It does not have to wait for court approval,” he said.
Bank of America is hopeful that the settlement will be approved, as it’s a key part of the process to enable management to focus on other issues.
The bank’s stock has been decimated this year — falling more than 50 percent since January. That’s because Bank of America has been hit by a spate of lawsuits from large investors, the government and corporations who say the bank should either buy back the billions of dollars of faulty mortgages or pay damages. Most of the mortgages were written by Countrywide Financial Corp., the country’s largest mortgage lender which Bank of America bought in 2008.
On the national level, there wasn’t any immediate reason, other than the Bank of America settlement, to explain the spike of defaults in such places as Tallahassee, Fla., where an additional 81 percent of homeowners received default notices. In Carson City, Nev., default notices rose by 185 percent.
Consumer advocates say there aren’t any signs that the shoddy paperwork practices have been cleaned up even as foreclosures are being sped up.
“Bank of America will do the exact same thing now, except faster,” said Don Barrett, partner at the Barrett Law Group, which is representing homeowners who seek to block the settlement. Barrett is a former tobacco lawyer who represented cases for attorneys general of several states against the tobacco industry.
Is BofA continuing to surge? Here are the monthly counts of NODs in SD County and statewide (September’s count is month-to-date):
|Month||SD NODs||SD BofA NODs||CA NODs||CA BofA NODs|
Here’s our next test of the short sale market.
It exemplifies a risk that banks may be considering when deciding how much of the mortgage market they may want, once the government gets out:
Excerpted from the latimes.com:
For people lucky enough to still have their credit ratings, bank accounts and home equity in good shape, the change means the opportunity to refinance at rates that once seemed unimaginable.
“I can remember when I thought 7% was a great loan,” said Roger Hornbaum, a retired city of Orange employee who has already refinanced his home on California’s Central Coast twice since purchasing it last year. “After the news this morning, maybe I’ll be getting another call from [my mortgage broker] and be trying it again sometime soon.”
Hornbaum’s broker, Jeff Lazerson of Laguna Niguel, said clients who pay closing costs and a 1% fee to him are refinancing into 30-year fixed-rate loans at 3.75%.
Of course, these days many people are in no position to buy or refinance a home. Many can’t meet the stringent lending standards that have prevailed since the housing bust and bank bailout, or they owe so much more than their house is worth that they can’t get a new loan at a better rate.
“The phone is ringing off the hook with people who want to refinance,” said loan officer Darin Hardin at Premier Mortgage Group in Ladera Ranch. “But the property values just aren’t there.”
The record low rates are driven by the Fed’s announcement Wednesday that it would load up on purchases of long-term government bonds and mortgage securities. The extra demand was intended to drive down long-term interest rates, including those for home loans — and it worked.
The yield on the 10-year Treasury bond, which serves as a benchmark for fixed mortgages, had closed at 1.94% on Tuesday. By the end of the day Wednesday it had dropped to 1.86%, and it plummeted Thursday to 1.72%, setting a record low before rising again Friday to 1.83%.
For a 30-year fixed-rate mortgage, the typical rate for solid borrowers had been 4.09% last week and early this week, according to mortgage finance giant Freddie Mac. That’s within a whisker of the record low of 4.08% set in 1950 and 1951. The Fed’s action dropped it well into record territory.
Mortgage professionals said many companies were making loans slightly more expensive Friday because their loan pipelines were full of more refinance requests than they could easily handle.
But should the 10-year Treasury yield stay low, there appears to be room for mortgage rates to fall further, industry experts said.
With a 1-year-old daughter, Joseph and Allison Dillard would normally be prime candidates to stop renting and buy a house.
He is a software engineer and she has a master’s degree in mathematics that should allow her to find work when their daughter is older. They have saved enough money for a 20% down payment on a single-family home in Mission Viejo or Laguna Hills, or perhaps a town home in Irvine, she said. And they have been pre-approved for a loan through Hardin, the Ladera Ranch mortgage banker.
Having looked at homes off and on since early this year, the Dillards stepped up the search this month after Joseph settled into a better new job at Google Inc.’s offices in Irvine. But they haven’t taken the plunge into ownership.
“The mortgage rates are so low but we’re worried, because we don’t know much further housing prices will fall,” said Allison, 30. “We’re trying to gauge the potential risks and benefits.” In any case, the Dillards figure, the economy’s precarious state means they’ll have at least another year before interest rates rise significantly. “It doesn’t seem like they’ll be jumping up any time soon,” she said. “So that’s not motivating us to do anything right away.
(please see comment section for discussion)
Hat tip to Daniel for sending this along, from Spiegelonline:
The people who could ultimately give Greece the coup de grace are not the kind to throw stones or Molotov cocktails, and they have yet to torch any cars. Instead, they are people like 60-year-old beverage distributor Angelos Belitsakos, people who might soon turn into a real problem for the economically unstable country. Feeling cornered, he and other private business owners want to go on the offensive. But instead fighting with weapons, they are using something much more dangerous. They are fighting with money.
Belitsakos is a short, slim and alert man who lives in the middle-class Athenian suburb of Holargos. He is also the physical and spiritual leader of a movement of businesspeople in Greece that is recruiting new members with growing speed. While Greece’s government is desperately trying to combat its ballooning budget deficit by raising taxes and imposing new fees, people like Belitsakos are putting their faith in passive resistance.
The group’s slogan is as simple as it is stoic: “We Won’t Pay.”
This business owners’ absolute refusal to pay any taxes resembles an uprising of the ownership class, rather than the working class, a rebellion of the self-employed business owners who have long been the backbone of Greek society. These are not the people who weaseled their way into Greece’s oversized civil service; these are people who put their money in the private sector, working 12-hour days, seven days a week. Or so Belitsakos says.
Standing in his small store, Belitsakos makes a sweeping gesture and says that the people in his movement no longer have a choice. “The state will kill us,” he says. “We’re acting in self-defense.” Then he starts to do the math. Over the last two years, his sales have massively shrunk as 60 of the tavernas and restaurants he used to make deliveries to have terminated their contracts with him. At the same time, the government has raised the value-added tax (VAT) twice while imposing a never-ending series of new fees. He mentions the €300 ($406) one-time fee for the self-employed, a two-percentage-point boost in the VAT, a €180 solidarity levy for the unemployed and a property tax that is “easily a few hundred euros every year.”
The taxes are part of Athens’ last ditch effort to avoid drifting into insolvency and to live up to the promises of austerity it delivered to the European Union. The country’s vast debt means it is already reliant on the steady drip of aid it receives from a €110 billion rescue package passed last year, with a second such package likely to be passed this fall. But each payment from the fund is dependent on progress being made on the effort to clean up the country’s finances.
That progress has been halting at best. In an effort to move the process forward, the government of Prime Minister Giorgios Papandreou has recently announced it intends to cut thousands of more civil servant jobs. And it introduced a controversial one-off property tax which has angered many. Several other taxes and fees have also been introduced.
Belitsakos calls them “charatzi,” a word from Ottoman times that can perhaps best be translated as “loot” or “compulsory levy.” The term is meant to indicate taxes levied arbitrarily and without justification, such as the tithe once paid to feudal lords. “But I can’t and won’t pony up. It’s wrong,” Belitsakos says. “Don’t you understand?”
The situation finally drove Belitsakos to write a letter to the head of the local tax authority in the name of his group. “We see ourselves facing a whole series of new taxes,” he wrote. “We are protesting and enraged.” He went on to charge that the only purpose behind the new fees was the “dispossession and impoverishment” of the Greeks and that he was now forced to resist. Briefly put, he wrote: “We won’t pay.”
Belitsakos says the tax official he handed the letter to was understanding and friendly. The fact that the civil servant put on a brave face might have something to do with all the TV cameras that were present. But, in a place like Greece, it is also entirely possible that the official was simply not all that surprised that someone would announce they were evading their taxes.
As well-known analyst Babis Papadimitriou puts it, the average Greek may well love his country, but he views the state apparatus as a power that one can and should plunder. Papadimitriou says that while the European average for VAT taxes that are evaded is 10 percent, the rate in Greece is roughly 30 percent. About a third of the entire economy happens off tax-authority radars.
These days, even communists, unionists and leftists are raising a public outcry against the new taxes. This week, Aleka Papariga, the general secretary of the Communist Party of Greece, said that the only way to stop the complete bankrupting of the people was for them to not pay the “charatzi.” In fact, financial resistance had now become the supreme civic duty, she said.
In an interview with SPIEGEL ONLINE, Greek Economy Minister Michalis Chrysochoidis said: “The question is how we can create a feeling of solidarity. One for all and all for one, that’s what it’s about now.” Still, Chrysochoidis would not answer his own question. For the moment, he said, it doesn’t look like the government can count on many of their fellow Greeks being willing to sacrifice themselves for the interest of the state. In fact, people are abandoning the government in droves.
Belitsakos, the beverage distributor, can’t and won’t play a role in rescuing his country no matter what. The reason has nothing to do with patriotism. Instead, it has to do with his mistrust of the government in Athens and “international financial capitalism” and the fact that, despite having once studied mathematics, he still can’t fathom the amount of money at stake here.
Belitsakos stresses that his plan is to refuse to pay any and all taxes and fees. If he has to, he says he will either go broke, to jail or both. He is convinced that there are thousands upon thousands who think just like he does and that, in the end, the Greeks will win this battle that they never chose.
The only question is what they really have to win.