Archive for September, 2008
Show Time! Ventura County Real Estate Doing’s for Week Ending September 27, 2008
September 28th, 2008 Categories: Weekly Real Estate Activity In Ventura County
Quiet on the set. Lights! Camera! Action! (Jeez…I had to say that……).
The political Oscar show has begun in Washington.
The Democrat Enron case (Fannie Mae and Freddie Mac) show has started .
The Frank’s and Dodd’s who engineered these quasi-government companies in the 1990’s Clinton Administration are now heading the campaign to make garbage look like gold with a “bail out”.
If Washington wants to help Wall Street what should be done is to create a 30 year to 50 year bond which would be paid back with interest (say at 6% 
or more) to the taxpayers but it would be paid by those being bailed out.
The political establishment does not have to saddle the taxpayer (Main Street) with this political, thoughtless financial burden created by Congress. This is the capitalist way of doing things which is what made the United States great.
Allow Fannie Mae and Freddie Mac to re-package their questionable mortgage notes, discount them to what the market will bear, and in return they will get some money for operating expenses. The people buying these re-packaged item(s) will either make a lot of money or lose significantly…..but that is the investors choice.
The bond could be set up so that the first 10-20 years would be interest only; the last 30-40 years would be amortized (principal and interest) over the remaining life of the loan.
I think 30 years is better than 50 but I willing to give a little. Why 30 years? The 30 year mortgage is the standard mortgage period for Main Street, so the same should apply to Wall Street, Washington Street, Detroit Street and any other street you wish to add.
But what do I know…..I live on Main Street and do not understand the on-goings of Washington or Wall Street.
There is a book entitled “Waking Giant: America in the Age of Jackson” by David S. Reynolds (Harper) in which the author describes the President Jackson era of rabid growth, banking brawls and other faddish items. As a critic wrote: “Jackson hated banks—hated the idea of a government protected money machine–and he vetoed a bill to renew the charter of the Second Bank of the United States which can be loosely described as yesterday’s Federal Reserve. This veto occurred in an election year.
What is interesting is the presidential issue then is the same issue today….a referendum over the constitutionality, equity and efficacy of banking in general (Fannie Mae and Freddie Mac). What Mr. Reynolds concludes is that in Jackson day, just as today, we are in an age of hoaxes and nostrums. We have changed, but haven’t changed much since 1832.
The next step would be a complete investigation and removal of the political people involved in this whole mess.
And the brains and management (that keep this Country going) do not reside on Wall Street or in Washington but on Main Street.
Ventura County:
The past week showed significant gains in sales, a big drop in listings, and variance between list price and actual sales price of homes sold dropped by 50%. Days on the market for homes sold was high at 99 days compared to the average of 71 days the week before.
But the market appears to be sound however the drop in jobs and the increase in unemployment have not been incorporated in the numbers so the impact is still fluid.
Until then it is a good market as shown in the table below.
The monthly chart below and the Spot Yearly Comparison between 2006 and now suggests that the market is looking for balance which I think occurred in June/July of 2008. The disconcerting jumb in inventory was not expected but this may simply be a minor hiccup for this period. But the trend appears to be done.
Ventura County has witnessed a 25% drop in home values since 2006. Compared to other areas such as Redlands, etc., this is relatively small. However areas such as Fillmore and Santa Paula have seen an average of 50% decrease in home values. Fortunately other parts of the County pared that number down.
Your comments are welcomed.
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Uncle Sam’s Enron! Ventura County Real Estate Doing’s for Week Ending September 20, 2008
September 21st, 2008 Categories: Weekly Real Estate Activity In Ventura County
We are witnessing the best day time soap opera ever written.
It has Greed, Sex, Lies, Apathy and maybe a Cover Up? Hollywood could not ask for a better script.
One hopes that all of this is make believe but unfortunately things are beginning to unfold, quicker than most people want or expected. The good stuff probably hasn’t been seen yet.
So let’s see…..in addition to Fannie Mae and Freddie Mac, this past week we bailed out AIG (which if I read the transaction correctly may not be a bad thing ….. AIG pays everything back with interest and if they don’t they have trillions in assets which the government can sell off).
Also there was some talk that the Federal Reserve will buy ALL bad notes from the banks. No one asked if this was limited to mortgages or if auto loans and others were going to be thrown into the pot. Expect the worse….all bad loans will include mortgages, auto and other loans (like credit cards).
So yes the United States tax payer will be plucked again by Congress. What is a mere $ 7,000,000,000,000.00 amongst friends with more to come. Maybe there should be more 000’s added to whatever that number represents.
This is going to be a slow, unwinding soap opera which will get an Oscar based on the performances yet to come from our politicians. I cannot wait until the other shoe drops.
And if that is not a kick in the pants, the people who created this Fannie Mae/Freddie Mac mess are still in office, heading many of the committees and (this is the best part of all), they are the one’s that will do the investigating and will be the architects who will create (yes, you guessed it) legislation to cure the problems they generated.
Perfecto! You cannot ask for anything better. Isn’t this the best script ever written. How many political Enron types do you think will end up in jail? My guess is ZERO!
Of course in most plots there has to be a bad guy. Yep….you guessed it. The news media are calling this soap opera that we are witnessing the Bush problem.
NOT SO! This is the 1990’s Democrat Congress fiasco. It’s their legacy to our future generations.
And another balloon released for general reading and reporting is that Fannie Mae and Freddie Mac are private companies. Not so! These are Government sponsored monopolistic entities pure and simple.
During the 1990’s the Clinton Administration saw fit to say and implement a strategy that all people deserved a home. A home in every pot so to speak. It did not matter that the recipient could or could not afford a home only that each person should have a home.
Subsequent to this policy a number of Republican law makers attempted to put controls on Freddie Mac and Fannie Mae but to no avail. Barney Frank and others muscled out any attempts to put controls on Freddie Mac and Fannie Mae. I have not checked but I wonder how much in donations Barney Frank and the others received from Freddie and Fannie?
This 90’s policy is what we are dealing with today. There are multiple billions of dollars at stake that the tax payer will have to pay. This is the legacy from the 1990’s group of Senators and House members that put into effect this horrible policy.
If this activity were undertaken in the private sector (remember Enron) to be sure we would be have hearing on Capital Hill instantly. But all is quiet. Hearings (if any) are going to started after the election. Why not now?
What should be happening now are hearing to see who is responsible for the overall mess. It is unfortunate that the culprits are in office and no one is going to be charged.
This is a government Enron type situation and the politicians are circling the wagons to protect their own.
The media has been eerrily quiet with the exception of blaming Bush (which in itself is tiresome). There should be lots of print and broadcasting as had been done with Enron and other companies. What has happened to our investigative reporters?
As happens in the private sector some politicians should be going to jail but don’t hold your breath because that isn’t going to happen.
There are lots of questions to ask. The first of which is “Who in Congress was keeping tabs on Fannie Mae and Freddie Mac? Why didn’t they see what was going on? What committee(s) and who are the committee members that are supposed to be watching the public interest?
Prison seems like a good place to put many of these people…..just like one would do in the private sector.
But it appears that the law which covers these crimes is handled differently for the private sector than for public crimes of the same nature. Enron now appears to be a love story compared to what is happening in Washington. Funny how that works out.
And do not get too comfortable……oozing out of the wood work will be Uncle Sam having to rescue State pension plans which are beyond the reach of many municipalities to cope with. Now that is going to be one heck of problem to resolve.
I suspect that a shock is in store for the system. In the private sector this would be handled via a bankruptcy and all pensioners would likely lose. I suspect that the public sector will also declare bankruptcy and all pensioners would lose.
Let’s add to glowing embers the possibility of a Jimmy Carter’s era of 17% mortgage rates? Oh….by all means one should expect healthy tax increases but that may a difficult task to legislate.
This gets better all the time…..I am running out of pop corn so wait for the next installment.
Side bar: From an historical point of view there were four panic occasions in which the Government had to act.
Panic of 1792. Nobody is around to discuss this situation but the Federal Government acted to take over State debts from the Revolutionary War.
Panic of 1907. Again not too many people around to address this situation but it appears there was a run on banks and trusts for failed loans in a copper company.
The Depression (1930’s period). The Home Owners’ Loan Corporation was created whereby Congress bought default mortgages (about 1 million mortgages) from banks, refinanced them at lower interest rates for fixed, 15 year terms. The stock market crash was the culprit.
Savings and Loans Crisis (1986-1995). Congress created the Resolution Trust Corporation to clean up the Savings and Loan mess created by failed commercial real estate loans which totaled $ 124 billion.
Ventura County.
Mentioned repeatedly was the fact that Ventura County appeared to be immune to the goings on National landscape. I hope that is remains true.
It appears that the shield has been dented. The shield hasn’t been punctured but the reports of jobs decreasing significantly often is a first step for other things to unravel.
The weekly real estate numbers appear to be strong. There has been a sizable reduction in listings; homes continue to sell at a good pace; days on the market appears to have settle in at about 6-8 weeks; but the variance between list price and sales price increased significantly over the last week. The culprits for this are high end residential sales. Properties selling for less than $ 500,000 tend to be less inclined for significant discounting.
Sidebar: Not much has been mentioned but it appears that foreclosures for properties above $ 1,000,000 is increasing significantly especially in areas of Florida, Nevada and California.
Overall the Ventura County real estate market is good and as can be noted the appreciation rate for County real estate will be approximately 7+% for the next 12 months.
Your comments are welcomed.
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OK…I Give Up! Stop Robbing Me. Ventura County Real Estate Doing’s for Week Ending September 13, 2008
September 14th, 2008 Categories: Weekly Real Estate Activity In Ventura County
Well let’s see what happened this past week.
On the National level and to no one’s surprise Fannie Mae and Freddie Mac were put into receivership.
Unfortunately the culprits that created these entities are now working on Fannie Mae and Freddie Mac II. Who are the culprits? View the article written in July, 2008, http://www.venturacountyretalk.com/2008/07/20/ventura-county-real-estate-doings-for-week-ending-july-19-2008/.
Yes you guessed it….Barney Franks and his coharts. The crafted legislation created by these brain thrusts will only cost the American taxpayer BILLIONS of $$$$$.
Just cannot wait for the next gift we will receive from our in-place political santa clauses.
In October, 1992, Jim Leach, Iowa Republican pleaded to put measures in place to control Fannie Mae and Freddie Mac. Barney Franks, Massachusetts Democrate musceled a counter arguement and prevailed.
Again in the year 2000 there were more cries to control Fannie Mae and Freddie Mac and once again Barney Franks prevailed citing that these institutions were public agencies.
Our political people (both in Sacramento and Washington) have redefined public agencies with self gratification, activist agendas and investment machines. One should worry when political people note that what they do is in context of the “will of the people”. Their people count is limited to the number of fingers they have on their hands.
We have too many Barney Franks types in Sacramento and Washington. What needs to be done now is to give these folks beach lounges and retire them to the beach. Their legacies are getting too expensive for tax payers.
Not all was bad this week. Interest rates dropped to 5.5% from above the 6% line. They should be going lower but banks will be hesitant to really provide the relief the Federal Reserve has put into place over the last several months.
Lines of credit are becoming extremely difficult to obtain; mortgage applications are still be made difficult. So the folks that should be helping the consumers are putting the screws to them instead.
The dollar dropped significantly this past week creating street talk that the Federal Reserve is once again going to lower interest rates. If there is a decrease one should can expect to see a small drop of about 1/4 point (if that).
Ventura County.
It is interesting how Mother Nature introduces little characters which can create havoc.
One such introduction is the African moth (called the False codling moth or “Thaumatotibia leucotreta”), which is from the sub-Saharan Africa and trapped in Port Hueneme this past week. This moth can jeopardize Ventura Counties (and California) agricultural economy.
It appears that this little guy likes field crops, cotton, avocado, peach and citrus trees.
This moth does two things. It destroys the fruit and can destroy fruit trees. A double threat insect that can quarantine the above Ag products from leaving the county or State and all fruits cannot be sold for human consumption. The years of building markets overseas will be put in jeopardy if this insect isn’t isolated quickly and permanently.
Should the fruits have to be destroyed many households will have to find substitutes for row crop foods which will increase prices significantly on the produce that is available.
It is hopeful that there are minimal if any twits whose whole existence is to counter productive efforts to erase this nemesis.
This week listings continued to decrease; sales dropped slightly (from 119 two weeks ago to 100 last week); days on the market settled lower and the variance remains approximately the same.
As an aside I have noticed that previous terms and digs such as “low-cost” housing, housing prices are too high, “un-affordable” have been limited are not used either in print or visual media recently. Interesting how the market place put the brakes to these comments.
Your comments are welcome.
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Ventura County Real Estate Doing’s for Week Ending September 6, 2008
September 7th, 2008 Categories: Weekly Real Estate Activity In Ventura County
An interesting week to say the least.
It appears that Uncle Sam is going into the financial mortgage business with the pending (street talk) of a take over of Freddie Mac and Fannie Mae.
People are trimming down spending despite the small decrease in fuel prices. Retail sales have not accelerated with the stimulus package as expected.
Neither Fannie Mae or Freddie Mac (quasi-business Congressional inventions) will be the same.
There will be a complete transformation of management and do not be surprise if the result is a transfer of these entities to a “private company” (dare I say maybe foreign. Now that would upset the status quo wouldn’t it).
Refresh your memory by reading the July article (noted below) regarding the development of Freddie Mac and Fannie Mae institutions. The article is: http://www.venturacountyretalk.com/2008/07/20/ventura-county-real-estate-doing%e2%80%99s-for-week-ending-july-19-2008/ .
Add to the list the increase of unemployment and one starts to think that inflation is going to rear its’ ugly head and the economy is going into the tank.
Not so. Despite the negatives (which are pounded into our heads by the media) there was an increase in production, the dollar is starting to exert itself against other currencies and there is now more positive reporting on the bottoming of the real estate down turn.
Foreclosures are still high especially in California and Florida (and it looks like Ohio is getting hit as is Michigan). But other areas of the country are holding their own.
Forbes recently listed Albuquerque, New Mexico, Charlotte, North Carolina, San Antonio, Texas, Portland, Oregon and Austin, Texas as areas with great growth possibilities.
I do not agree with Forbes. I do like parts of Texas but I still think that Oklahoma, Mississippi and Louisiana should not be left out of the equation.
The street talk is that the Federal Reserve will not change the interest rate structure at its next meeting. Of more interest is (at least per the gossip on the street) that it is expected (hold onto your chair) that banks will start to lower mortgage rates (with prodding from the Federal Reserve).
To be sure the decreases will be gradual but on can expect rates to start hovering around 5.75% instead of 6+% within the next few weeks.
Banks are cinching down lines of credit. So this haven that a number of people sought has been walled up and people, and businesses, will have to look elsewhere (hard money) for funds.
Ventura County.
Despite all the National woes, real estate in Ventura County is doing well.
Inventory is down; sales continue to increase; days on the market showed a down turn and the variance between average list to sales price showed a decrease.
Home prices have reached the range of December, 2003-June, 2004 prices which was $ 489,040 to $ 566,654. The average sales price of a property in August of 2008 was $ 517,106. When compared to the peak prices of the year 2006, Ventura County home values have decreased approximately 25%.
But (there is always a but) values of home properties in Ventura County since 1997 have increased approximately 167% or at an average of 14.5% each year since 1997.
So there has been a lost from the 2006 price peak but overall the County has continued to strengthened upward over a 14+ years.
Since the bottom has been set (fizzle portion of the above chart) one can now picture what the future (sizzle) is going to be and it is excellent for Ventura County.
Not many Counties in California can show this type of real estate growth and there are very few in the Country that can show this type of growth.
Yes we had a few bad years but overall we have had it very good.
Your comments are welcomed.
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Hey…Do You Know Who You Are Dealing With?
September 2nd, 2008 Categories: Real Estate News
Recently a presentation was made by Erin Curtis entitled “Why Can’t We All Get Along? Generational Struggles in our Colleges”.
Erin was focused on the peoples that now attend colleges and addressed their generation and what each generation brings to the campus.
I saw this presentation somewhat differently. I looked at the presentation as a real estate broker and saw in it the various ages that a realtor works with.
I took from Erin’s presentation and added a few items that expands his college approach and transitioned it to the real estate world.
As one reads they themselves will certainly see items that have been excluded so it is not to be considered a complete picture of real estate buyers or sellers…..but simply is a start of who you are working with and what their bases of doing and acting as they do.
I found that there is some relationship between Generation Y and Traditionalist (as labeled above) even though there’s 50+ years or more between these generations.
I also noted that Boomers and Traditionalist were almost opposite. Traditionalist are the parents of Boomers and it appears that Mother Nature ever so cleverly made sure that there would be some significant differences in attitude and human relationships.
Enjoy the reading and add to and subtract from the chart as you see fit.
Your comments are welcomed.
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