Central Valley Business Times
More foreclosures loom as pace of mortgage defaults quickens

A softening home market is not by itself to blame for the jump in California home foreclosures says a San Diego attorney who specializes in helping those faced with losing their homes.

The most common reason is an event such as loss of job or illness to a family’s major income producer. But attorney John Brady says there are other causes that he is seeing more often.

“It could be predatory lending,” he says.

“I’ve had a number of people in this last month – this is completely unbelievable and so foreign – their mortgage payments are more than their income,” Mr. Brady says.

Why don’t people understand that you need to pay to live in a place as special as California?

Besides, everyone knows real estate only goes up in the long run. So if you wait long enough, you’ll be able to sell and be a millionaire.

Santa Barbara OKs Housing Aid for Folks Making Up to $160,000 a Year – Los Angeles Times
Santa Barbara OKs Housing Aid for Folks Making Up to $160,000 a Year
In a city where the median home price is over $1 million, a planned condo project’s units will be priced below market from $495,000 to $595,000. Teachers, nurses, police are among the expected buyers.

Wow. Will Palo Alto follow suit?

2Q 06 First-time Buyer HAI
The percentage of first-time buyers in California able to afford a median-priced home stood at 23 percent in the second quarter of 2006, compared with 30 percent for the same period a year ago, according to a newly developed index released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

C.A.R.’s First-time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of first-time buyer households that can afford to purchase a home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.

The minimum household income first-time buyers needed to purchase a home at $482,000 in California in the second quarter of 2006 was $98,720, based on an adjustable interest rate of 6.48 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $3,290 for the second quarter of 2006.

Congrats California! Let’s try to aim for 10%!

The Housing Bubble Blog » ‘The Unstoppable Ascent Has Stopped’ In San Diego
“San Diego had the wildest run-up among major California cities. The boom was stoked by cheap loans, changes in tax law, creative financing and a generalized mania that fed upon itself. The market also began to fade first in San Diego. Whatever happens here, optimists and pessimists agree, will happen later in the rest of the state.”

“At a sales office in the Ocean Beach neighborhood, broker David Davis said the market had already bottomed out. ‘Our No. 1 industry is now tourism,’ Davis said. ‘Unless they take away the sun, we’ll be fine.’”

“If Davis radiates cheer, the fliers taped to the window outside the office door tell a different story. ‘Huge Price Reduction,’ one says. Another says both ‘Reduced’ and ‘$15,000 Credit.’”

“In some cases, the prices are dropping faster than the fliers can be reprinted. A two-bedroom town home has its price of $324,900 crossed out with a marking pen, replaced by $309,900. Another house, a four-bedroom in suburban La Mesa, has a printed price of $575,000. Below that is handwritten $549,000. Scribbled below that is a new minimum: $499,000.”

This will never happen in the Bay Area. Two reasons:

1) The Bay Area is special.

2) They’re not making any more land.

Economics Roundtable: The California Economy — Housing Boom or Bubble? – Google Video
Christopher Thornburg, senior economist at UCLA’s Anderson School of Management, offers his perspective on whether the recent cooling trend … all » in residential real estate indicates an imminent bubble burst or just a lull in California’s otherwise booming housing market in this edition of the Economics Roundtable at the University of California, San Diego. Series: “Economics Roundtable” [Public Affairs]

This is well worth the watch. Chris is pretty funny – including the only joke you’ve heard that has both Rafael Palmeiro and Alan Greenspan!

Housing Boycott
Housing Boycott
San Francisco Bay Area

send suggestion | mailing list

What is this?
My wife and I are tired of the insanity of Bay Area housing prices, and want to fight back. Most of our friends — and we suspect, you — do too. So we created this website to start a grass roots movement to stop the insanity, through a synchronized boycott, and through education. We CAN make a difference. Read more here.

This reminds me of those “If we all stop buying gas, they’ll have to lower the prices!” campaigns.

I’d rather just make fun of the bubble.

After Friday’s reality check, it’s time to go back to unreality…

Sacramento Land(ing): 50-Year Mortgage a Penny Saver?
A reader noticed this ad in a local PennySaver. Is this a sign of the end of the housing boom or is this the beginning of a brave new world of multi-generational mortgages?

Wow! I don’t think people even get 50 year mortgages to live in New York City!

But then again, New York City is no Lodi.

WSJ.com – Share of People Owning Homes Is Leveling Off
After climbing steadily for a decade, the nation’s homeownership rate appears to have leveled off.

I’m semi-surprised that the Bay Area was only 4th. But the other 3 are California… so that makes sense.

CBS 5: CA Homes Sales Up, Bay Area Sales Declining
Californians bought new homes in 2005 at the highest rate in two decades, according to a report released Friday.

DataQuick, a real estate information service, reported 136,228 newly built homes were sold last year, the highest amount sold since the company began taking records in 1988.

San Mateo County was the most expensive place to buy a brand-new house. The median price was $900,000.

DataQuick President Marshall Prentice attributed the record number to strong demand and relatively low interest rates in 2005.

But overall sales of Bay Area homes have declined for the last nine months, according to a report released last week by DataQuick.

Uh oh. Is this the end for the Bay Area Bubble?