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Post by jeffolie on Feb 16, 2009 14:00:12 GMT -6
The Southern California Inland Empire housing prices are half of what they were 2 years ago. Declining housing prices are in constant decline and the 50% mark does not look to be the bottom as foreclosures and unemployment soar. This is not an old story, it is an ongoing story of collapse. Certainly complex financial instruments based on mortgages are loosing value and the financial community pretends they have more value than they do by religating these instruments to 'level 3' assets which they mark to myth rather than mark to market. How the lying, corrupt government can pretend to buy these troubled assets at a certain price is nothing less than a fraud on the taxpayer because the value of these troubled assets' underlying mortgages and properties continues to collapse. ====================================================================== Never have home prices fallen so steeply and quickly in Riverside and San Bernardino counties as they have since reaching dizzy heights two years ago. By contrast, he said this time in just two years the median price of an existing home in the two-county region has plunged more than 50 percent, from $410,000 to under $191,000, according to the California Association of Realtors. And there is no sign that the price decline is over. www.realestatedecline.com/SoCals_Inland_Emprire_Home_Prices_Crash_More_Than_50%25.htm
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Post by unlawflcombatnt on Feb 16, 2009 21:42:07 GMT -6
It seems likely that home prices will have to fall much further to reach a stable level -- a level that is consistent with the historic ratio between incomes and home prices.
But there's another fly in the ointment. There is a gross oversupply of homes. If there is an oversupply of homes compared to historic levels, then the price will have to drop to an even lower level than it would otherwise.
If a home was "worth" $200K in inflation-adjusted dollars in 1995, then the inflation-adjusted price in 2009 may well be much lower — say $180K today, due to an oversupply of homes that did not exist in 1995.
The oversupply of homes is going to drive prices down even further than historic norms. And every taxpayer $ that goes to bail out companies involved in home construction, causes home prices to decline further, since it leads to an increase in supply of homes.
If we had anything like normal market forces, new home construction would be almost zero, instead of ~500K per month.
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Post by xtra on Feb 16, 2009 22:14:06 GMT -6
i have some friends in California that think im nuts and need meds for sending them this stuff.
they all work for the government and see no problem what soever. they all go to the races, sport events etc. etc. some have hot rods as a hobby.
some are even upsidedown in their houses, yet still think i lie.
its a nightmare waiting to wake up to them. unless working for the government is the only thing left.....
and that would be a nightmare for the rest of us.
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Post by graybeard on Feb 17, 2009 0:19:06 GMT -6
I have read that the majority of jobs created in the last several years were govt jobs.
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Post by whoswho on Feb 18, 2009 10:26:35 GMT -6
Are your friends middle aged government workers? Yes, that group is oblivious. I had the misfortune to lose my private sector job and come to work with a bunch of them. Reality is going to be a big bite for them one day, I imagine.
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Post by waltc on Feb 18, 2009 12:46:48 GMT -6
Business people are f**king nuts.
I live in the high desert of So. CA and there is still construction going on, new Lowes, Wal-Mart, Target and Home Depot are going to go up in a hard hit area nearby and this is just after a Super Target(which is a few blocks away from a Lowes, Sams Club and Wal-Mart) just opened up a few miles away from me in another area.
And there is another shopping center ready to open up just a few miles in another direction and another shopping center ready to break ground right next to it!
One could easily get the impression there is no economic distress by the all the construction going on, especially for the big box boyz.
Oh yeah Best Buy is always doing a brisk business, people need their plasma screen idiot boxes, Bose sound systems and Ipods regardless of the economic climate.
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Post by graybeard on Feb 18, 2009 15:07:53 GMT -6
That's why CEOs are paid so much; they're smarter than you; yeah, right.
They fear losing market share to their competitors, regardless of reality. Also, they may have committed to these projects a couple of years ago, based on housing values, building permits, ect.
GB
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Post by kramer on Feb 18, 2009 18:07:01 GMT -6
It seems likely that home prices will have to fall much further to reach a stable level -- a level that is consistent with the historic ratio between incomes and home prices. Too bad for us that Obama wants to stop the slide in housing prices. This in my opinion, is going to prolong this economic mess. Kramer
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Post by jeffolie on Feb 18, 2009 19:26:22 GMT -6
Obama said watch my right hand with the pretty $75B package for troubled homeowners; but, don't look at my left hand and the $200B package for the GSEs.
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Post by graybeard on Feb 18, 2009 22:25:02 GMT -6
If there were enough good paying jobs to go around, no other stimulus or bailout would be needed.
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Post by unlawflcombatnt on Feb 19, 2009 1:42:37 GMT -6
If there were enough good paying jobs to go around, no other stimulus or bailout would be needed. Absolutely. Besides being overpriced to begin with, the other reason home prices are going to keep falling is because of falling wages and employment. Like Democrat Gene Taylor of Mississippi said when opposing the "stimulus" package, the best stimulus would be to repeal NAFTA and Permanent Normalization of Trade relations with China. Between those 2, we have a roughly -$400 billion trade deficit. That's the equivalent of 5.7 million jobs, based on a $70K per job. ($400 billion ÷ $70 thousand/1 job = 5.7 million jobs)
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Post by whoswho on Feb 19, 2009 6:53:59 GMT -6
If there were enough good paying jobs to go around, no other stimulus or bailout would be needed. E X A C T L Y. And because no one will address this very obvious fact, we are going to wander in the wilderness for forty years.
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Post by graybeard on Feb 19, 2009 6:59:22 GMT -6
Like Ravi Batra says, we should up the minimum wage to $10, even if it has to be subsidized initially.
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Post by xtra on Feb 27, 2009 21:58:45 GMT -6
Are your friends middle aged government workers? Yes, that group is oblivious. I had the misfortune to lose my private sector job and come to work with a bunch of them. Reality is going to be a big bite for them one day, I imagine. entire article www.bloomberg.com/apps/news?pid=20601109&sid=as3PyDwmDEQY&refer=homeCalifornia’s Newly Poor Push Social Services to Brink (Update1) Email | Print | A A A By Vivien Lou Chen Feb. 26 (Bloomberg) -- In California’s Contra Costa County, 40,000 families are applying for just 350 affordable-housing vouchers. Church-operated pantries are running out of food. Crisis calls have more than doubled in the city of Antioch, where the Family Stress Center occupies the site of a former bank. The worst financial crisis in seven decades is forcing thousands of previously middle-income workers to seek social services, overwhelming local agencies, clinics and nonprofits. Each month 16,000 people, including many who were making $60,000 to $100,000 annually just a few years ago, fill four county offices requesting financial, medical or food assistance. “Unless we do things differently, not only will we continue to be on life support, but the power to the machine is going to die,” said county Supervisor Federal Glover, who represents Antioch and the cities of Pittsburg and Oakley about 50 miles (80 kilometers) east of San Francisco. Contra Costa, an East Bay suburban region of more than 1 million, turned thousands of farmland acres into housing in the past two decades, becoming an affordable alternative to San Francisco. Now, the area is being hit by a double whammy, as rising unemployment increases demand for social services, while plunging home values shrink tax revenue and squeeze agency budgets. County officials made $90 million in cuts during the current fiscal year, and plan to reduce another $56 million, out of a $1.2 billion general-fund budget, in the coming year. County administrator David Twa said he doesn’t expect to see a “gradual recovery” in property taxes until 2012 or 2013. Safety Net The social safety net is being stretched “all over the country,” said Jacqueline Byers, research director for the National Association of Counties in Washington. “The formerly middle class who lost jobs, homes, or both suddenly are requesting assistance for the first time.” Nationwide, demand for food stamps, one of the first benefits that new applicants for services qualify for, has mushroomed since the recession began in December 2007. About 31.1 million people received food stamps in November, an increase of 13 percent from the end of 2007, according to the U.S. Agriculture Department, which administers the program. A record 5.11 million Americans were collecting unemployment benefits in the week ended Feb. 14. The jobless rate in Contra Costa, currently at 9.3 percent compared with a U.S. rate of 7.6 percent, is likely to reach as high as 12 percent, Twa said. Among local employers that have cut jobs or forced workers to take unpaid leave are USS-Posco Industries, a joint venture of U.S. Steel Corp. and Posco of South Korea, and newspaper publisher MediaNews Group Inc. “We are in a critical situation and it’s not likely to get better over the next several years,” Twa said.
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Post by unlawflcombatnt on Feb 28, 2009 1:35:40 GMT -6
"County administrator David Twa said he doesn’t expect to see a “gradual recovery” in property taxes until 2012 or 2013."
Gradual recovery? Not likely. Property was tremendously overvalued and is not going to "recover" -- ever. It may stop declining by 2012 or 2013, but even that's optimistic. Leave it to politicians to universally understate negatives.
"About 31.1 million people received food stamps in November, an increase of 13 percent from the end of 2007"
In my view, as well as that of many noteable economists (such as Joseph Stiglitz), food stamp expenditures are among the very best uses of government money. Not only is it going to those most in need of help, but it also has one of the highest multiplier effects of any government expenditure.
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Post by waltc on Feb 28, 2009 3:41:04 GMT -6
Wow what a witty comment Greybeard...
But all back handed insults aside, I live in one of the hardest hit regions of the real-estate implosion we have 10,000 foreclosed homes for a population of 300,000. Home prices went from $350k to $150k for new tract homes. The commercial real-estate market is even worse shape, we have boarded up Vons, Ralphs, Kmarts and more vacant strip mall stores than you can shake a stick at.
The jobs market just sucks. The only ones available are minimum wage service industry. Lockheed which is the only high wage employer in town, is deathly worried that DearLeader will gut the F-22 and F-23 like a fish and if that happens this part of Los Angeles county will crash income wise.
And what does Wal-Mart Inc, Home Depot and Target decide to do? Publicly announce about a month ago the construction of a shit load of new stores for a area already saturated with stores from the same companies. And the locals hate them to boot.
This isn't smart, there's no market research, its just more of the same stupid bullshit mentality that caused the over building to begin with.
Then again why should corporate executives care when they are rewarded with tens of millions even despite making one fucked up decision after another.
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Post by xtra on Feb 28, 2009 9:04:46 GMT -6
we have boarded up Vons, Ralphs, Kmarts and more vacant strip mall stores than you can shake a stick at. There called ghost malls. It a cute, new name they came up with. but its gonna get worse, much worse. Building notes are due in 5 years, not 30 like homes, so when these developers that built 3-5 years ago go to re-finance guess what the banks are gonna tell them?
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