February 9, 2013

More Bubblicious Signs of Bubbling Bubblicity

Sometimes, there’s a message out there with your name on it, so you get hit on the head with it again and again and again.  Here are some of the messages we got yesterday, and they all add up to the same thing.

130208-bubble-foreclosureFirst, looks like HELOCs are coming back.  No, they’re not at the insane rate of the glory days of 2006, but there’s more in 2012 than 2011.  So that’s something for us to keep an eye on. 

One of the problems with HELOCs was HELOCity, where every homedebtor used the line of credit not for major home improvements or emergencies, but as a full-time ATM.  People bought a lot of giant-ass SUVs and vacations and bling using the equity in their homes.  Why would they do something that stupid? Do they really think they’d never have to pay it back?  Some of us actually do remember when second mortgages were subprime mortgages throughout the industry.

Speaking of subprime, you know what else is back? Subprime mortgages! That article we featured last weekend on the Dignity Mortgage wasn’t the only sip of subprime sangria.  Gotta love this quote:

The Revival of Subprime: Will This End Badly?

By Matt Clinch | CNBC – February 8, 2013

The sub-prime market – risky mortgage backed securities – is hot again and its revival is exceeding many people’s expectations, the chief market strategist at Rosenblatt Securities says. He believes this will end badly.

The subprime mortgage crisis which led to the financial crash of 2008 involved institutions making loans to those that had difficulty maintaining their repayment schedule.

Wall Street brokerage firm Rosenblatt – which has been monitoring the situation since the last storm – says the credit-led bull market is well under way.

"The subprime market’s revival is proving to be even stronger than we had anticipated," Brian Reynolds said in a research note. "This is just a credit cycle, and it will eventually end badly like the others."

We are sure you are thinking the same thing we are: How can we best profit from so many other people’s stupidity?

130208-bubble-pamaiNext, several different reports of an increasingly skewed seller’s market.  We’ll have one up bright and early to start the week, and it’s a doozy.  Here’s a smaller example, an on-the-ground report from Definitely Not the Real Bay Area.  This poor agent says she listed a Blossom Valley property and now her phone is ringing every ten minutes.  Won’t someone let her get some quiet time and please offer twice the asking price already? 

130208-bubble-downpaymentBuyers now have to write beg letters to get noticed when there’s 40 offers on the table. And who can forget the lottery line for just 4 Gale Ranch models in San Ramon.  Need we remind you, Gale Ranch is not only in the East Bay, it’s in a place where they are still making more land. 

If you haven’t already seen this 2007 (!!!) video, enjoy it.  And if you have, sing along, because HERE COMES ANOTHER BUBBLE.

Comments (32) -- Posted by: madhaus @ 5:05 am

32 Responses to “More Bubblicious Signs of Bubbling Bubblicity”

  1. Tom Paine Says:

    Read the ubernerd posts at Calculated Risk about sub prime, then look at who is now getting these loans under what terms. Sub prime done properly is not a bad idea, done improperly, it’s awful.
    And yep, a minibubble. This one doesn’t have the legs of the last one, IMO. But plenty of people will get hurt…which is OK because we have to sacrifice for those doing God’s work.

  2. Real Estater Says:

    1234 S Mary Ave, Sunnyvale 94087:

    List: 1.098M
    Sold: $1.21M

  3. Real Estater Says:

    Interactive map: Cheapest and most expensive places to rent in the Bay Area

  4. Real Estater Says:

    Looking for a cheap place to live in the Bay Area? Start driving east from downtown San Francisco – and keep going.

    A Map of the Cheapest Places to Rent in the Bay Area

  5. Real Estater Says:

    Market is hot! hot! hot!

  6. waiting_for_the_fall Says:

    You know we’re in another bubble when RE crawls out from under his rock and sings the joys of buying.
    Better buy now or be priced out forever!

  7. Real Estater Says:

    Pralay, you missed the boat!

  8. Real Estater Says:

    Are you still waiting? Read the article above. Wait no more. The time to buy is now!

  9. Facebook Investor Says:

    You know we’re in another bubble when RE crawls out from under his rock and sings the joys of buying.
    ——

    You know we’re in another bubble when RE spends the whole morning browsing an irrelevant site while rest of bay areans enjoy another sunny Saturday morning.

  10. Real Estater Says:

    Pralay crawls from under the rubbles…

  11. Real Estater Says:

    KQED coverage with Michael Krasny

  12. Real Estater Says:

    Fact: People who followed Pralay’s train of thought (or lack of) are seriously screwed right now

    Fact: Instead of cheering the break in price increases during the financial crisis, Pralay should have taken advantage of the opportunity instead of wasting another one

    Fact: Bay area prices double every 10 years on the average. When market appears to be off-track, it only means price increases will be made up later. Now is a perfect example

    Fact: Foreign buyers with loads of cash are shopping the Bay Area market

    Fact: Multiple offers and overbidding are everywhere. Just saw a million dollar open house in sunny Sunnyvale. Realtors says 15 offers have already been submitted.

  13. madhaus Says:

    You know we’re in another bubble when your phone is ringing off the hook from Realtards begging you to sell through them.

    Friend going though divorce got a call from random Realtard asking if he was going to sell his house, because of the divorce. When asked how Realtard knew about said divorce, he said he went through court records. Yummy! Trolling through Family Court to feast on other people’s unhappiness! You know, most agents stick to ringing doorbells and asking if anyone in the neighborhood wants to sell. I’ve had at least five of them come by in the last month.

  14. SEA Says:

    “List: 1.098M
    Sold: $1.21M”

    Appears that $7M was left on the table: Why not list for $8.098M and sell for $8.21M?

  15. Real Estater Says:

    madhaus,

    You got too many untapped equity in your house. Did you ever learn about leverage in your physics class? It’s time to buy another house! Let some rentard pay for your coveted 94087 zip code, and use that free money to live in another house for the rest of your life.

  16. SEA Says:

    “Did you ever learn about leverage in your physics class?”

    Yes, leverage can make things more difficult.

  17. madhaus Says:

    Because my equity is untapped, I can live here for the cost of taxes, light bulbs, and Drano. Oh, wut will I do with no mortgage payment? Nobody will respect me!

  18. Facebook Investor Says:

    …..enjoy another sunny Saturday morning.
    —–

    And a sunny afternoon.

  19. Real Estater Says:

    >>Because my equity is untapped, I can live here for the cost of taxes, light bulbs, and Drano.

    But wait, you can do that even if you have 2 houses. Here’s how it works:

    Let’s say you rent out your house for $3K/month. You go buy another house with a mortgage payment of $3K/month. You use your rental income to pay for the mortgage on your new house. Wa la! You are living in your new house for free, and you get to own 2 houses.
    You gotta be stupid to not do it!

  20. Real Estater Says:

    F**ked Non-Investor:

    You can enjoy even a cold winter day if you bought Bay Area real estate!

  21. SEA Says:

    #19- You don’t seem to acknowledge that leverage can make things more difficult.

    “Here’s how it works:” You buy in the RBA, but you discover that you didn’t really buy in the Real REAL RBA; you were fooled by someone. Your value goes down by $3k per month while you collect $3k per month. One day you need to buy some light bulbs and Drano, and you’re complaining about the cost of maintenance.

  22. nomadic Says:

    #13, I’m not sure what’s worse: trolling court records, or admitting to trolling court records. They should add tact to the realtard curriculum. Along with spelling and grammar.

  23. Another Wave of the Bubble Wand: A $6.5M Crapbox in Palo Alto [Burbed.com] Says:

    [...] we had a brief summary of snapshots showing that we are indeed entering the early stages of a new real estate bubble.  Far-flung [...]

  24. Petsmart groomer Says:

    > Wa la!

    Seriously?

  25. madhaus Says:

    #22, that was my friend’s reaction as well. The Realtard had no idea that what he was saying was boorish and invasive, and persisted with his sales pitch: so are you selling? Do you need an agent? When would you like to meet? You haven’t talked to an agent yet, so why wouldn’t you meet me?

    My friend finally told the realtard if he did sell, he would use anyone but him.

  26. madhaus Says:

    #19, now you’re just trolling. A $3K mortgage payment at 3.5% interest is about a half million dollar loan (e.g. Not a lot of money). Why would I move out of my million dollar shack into a $750K shack? (And you know the bank won’t give you credit for the whole rental stream if you want to borrow more than that). Decrease my standard of living in order to destabilize my finances? What a great idea, sign me up NOW!!!

  27. waiting_for_the_fall Says:

    #25:RE is trying to talk you into what he has already done, which explains why he’s so happy with the bubble. Prices have to continue rising to justify his financial decisions.
    If prices drop, his world will come apart.

  28. South Bayer Says:

    Just saying…somebody is rather spoiled here. $750k house is ruining her quality of life when most of us are happy to locate a rental apartment?

  29. madhaus Says:

    Poor South Bayer, calling people spoiled for not wanting to take on excessive financial risk in an uncertain market. Socks on too tight?

  30. Petsmart groomer Says:

    > $750k house is ruining her quality of life [...]

    Nice way to interpret madhaus’ statement (“Decrease my standard of living in order to destabilize my finances?”).

    Next time you’re in Palo Alto, grab a thesaurus at the library (and get a dictionary for RE as well while you’re at it). Wa la!

  31. SEA Says:

    Wa la magic!

  32. The DQYDJ Weekender, 2/16/2013 Says:

    [...] ‘turning points’ in sports (often sarcastically) before they happen, Burbed is calling bubble-mania in the Bay Area with this $6.5 million scraper in Palo Alto.  Buy now or be priced out forever!  What could [...]


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