You know the housing market’s in trouble when…
…real estate agents and sellers start investing in St. Joseph statue kits:
What has become the worst home-sales market in recent years has become a great one for St. Joseph statues, as desperate sellers of various faiths invest as little as $4.95 and hope for a miracle.
Meanwhile, buyers and others moving into their new homes have their own rituals of faith, including house blessings and talismans. Tradition calls for burying St. Joseph upside-down in the yard, facing away from the house, though some believers say keeping the statue in the house is enough.
“In Baltimore City, I have concrete. So I have a flower pot,” Statham said. The statue, in its plastic bag, went in with a Norfolk Island pine, the greenery decorated with bells and a rosary. The pot graced the front steps by the real estate sign. “You have to have a little faith and see what happens. It’s worked for others. It’ll work for us,” said homeowner Jimmy Velez, who is Catholic.
He and his wife, Michelle, want a smaller house. If this one sells, the statue will be unearthed and relocated with the couple. “Maybe we’ll put it in the front window. Or on the fireplace, if we have a fireplace, the mantel,” he said.
If this works, Statham said, she’s buying more statues. Kits typically include a plastic statue, a bag (for storage or to keep the statue clean when buried), instructions and a suggested prayer.
Not everyone thinks it’s a good idea, whether it works or not. “We consider that superstitious practice, and it is not encouraged at all,” said the Rev. Louis Micca, pastoral director of St. Jude Shrine in Baltimore.
There’s actually a novena prayer to sell a home. The WSJ looked at the phenomenon last month.
Not a good omen.
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No joke, this housing market is ugly. Layoffs left and right.
But I put my house on the market anyway. I bought it in 99, when I only had 6 kids. Now that I have 13, I’ve outgrown it…a little.
Need to buy a 10-acre plot and build. Here’s hoping and praying.
I don’t know if this is nationwide, but here we have been seeing a lot of TV commercials advertisings realtors. Not specific real estate companies, just asking people to use realtors in general. They must be hurting.
AC, you need to buy a Hotel…
Since the end of last year, 189 major US lending operations have closed their doors. There are no good numers I can find on job losses, but they have to running close to 200,000 or more. Foreclosures are running close to twice the rate of the prior year, which depresses resale and new home prices.
And for anyone paying attention, the dollar has seriously declined against other currencies – 20% or so since the beginning of 2007.
Saint Joseph may help, but it might be time to look to Saint Jude – the patron saint of hopeless causes.
I’m on the commercial side of the real estate biz, but the residential market is as bad as I’ve seen in a very long time. Unfortunately, I’m afraid we may be heading for a real deal recession.
New housing starts are up. The market will level out. It may not hit the highs everyone likes but, it will adjust.
No doubt about it Jim M.
In our area the housing market has slowed down, but the 3 houses on my street sold in less than 90 days and they are still building new homes in our area. If Secretary Gates starts laying off or furloughing Civilians around January due to the urinary olympics with Congress we can go about 2 months before we are in serious trouble.
I have noticed that the three secrets are still Location, Location, Location.
That said, AJ, my current house is a former small church. We renovated it into a 7/3 house. I kid-proofed my house, but they keep getting in. heeheehee…
Here in Jax, the market is correcting itself. The biggest competition is new homes. People figure for a few shekels more they can buy new and not deal with an older home.
I don’t understand why most people don’t get it. The housing market is in bad shape because housing is financially out of reach for most people. I’ve been saying this for the last 3 years. At the time, many disagreed with me because they refused to believe that their homes aren’t worth as much as they think. Now, many of those are seeing things my way. It’s going to take another 4 to 5 years before this mess resolves itself (if it resolves at all).
The only thing that will sell your home is having it listed at the right price and having your home in good showing condition. The market is correcting itself and those sellers willing to understand that are still selling their homes in a short amount of time.
I sold my house on May 27 for cash. A week later the deal was going to go south unless I agreed to wait until the buyer sold a property. Still waiting. It is brutal in south Florida.
I’ve been hearing about St. Joseph statues for years…good or bad housing markets. There’s always somebody who can’t sell their house, for whatever reason – price, location, etc.
I work in mortgages and the housing crisis is only going to get worse. I believe that we may reach double digits in foreclosures before things bottom out.
One bank rep told me that 35% of their second mortgages on 80-20 loans were in default. Now, let me explain that in layman’s terms. An 80-20 loan is a loan to one hundred percent of the value of the property split 80-20. The reason that so many of the seconds were in default is that most people know that the second loan can’t really ever get any money through foreclosure. In other words, essentially 35% of their 100% mortgages were in foreclosure.
I wrote a detailed piece about about the crisis and its individual players. The thing everyone should be aware of is H.R. 3915.
Here is some information about it
Man, I need to start a St. Joseph statuary so I can buy a home …
If it’s so bad how come Boardwalk and Park Place are still the same?
The housing market may be bad in some areas but in our little corner of Oklahoma I think it’s still doing ok. Lots of building going on and homes selling at a decent pace.
However, housing has gotten really expensive since my husband and I were first time buyers 7 years ago. I don’t know how some people in other parts of the country can afford homes at all!
Yep, now that’s the real biz to be in.
Age gives a little perspective. These things are cyclical…If you don’t need to sell now, sit tight.
Please read (and have your children read) Extraordinary Popular Delusions & the Madness of Crowds by Charles Mackay. It would have kept some from getting burned in the stock bubble of 1999-2001, and can help you make sense of a “hot” market of any kind. Truly important for your kids.
In spite of all of this, there are still 650 sq ft. houses not 1/2 mile from me that are on the market for $600K. CA needs to wake up.
Unchecked speculation always leads to disaster. It happened in 1929 and it’s happening now. Yet nobody in government gets it. Instead, the word from K Street is, “I’ve upped my fortune so up yours.”
In housing it is of course, location, location, location, and so everyone that focuses on one specific market or another or gives anecdotal data like “in my neighborhood” isn’t looking at the big picture.
The big picture is this. Everyone involved in mortgages, including me and my colleagues the mortgage brokers, acted as though prices would go up indefinitely and that got everyone in trouble. As such there are a lot of people holding onto property they simply cannot afford. There are still plenty of people holding onto such property and until everyone is shaken out, the price of real estate on the whole will continue to go down.
That is only part of the problem. The biggest part is that Congress always feels the need to respond. Right now, their response is H.R. 3915 and at least one other bill introduced by Dick Durbin.
H.R. 3915 is a disaster in the making. Here is the practical effect of H.R. 3915
That isn’t merely an annoyance everyone but in fact a perpetuation of the problem. Congress is up in arms because of the nebulous predatory lending. Two things, no one can actually define predatory lending and that always leads to more paperwork. Two, they cause the problem by creating all of this regulation that leads to all of this paperwork in the first place. Remember everyone, in the real world, the one not occupied by Congress, scummy mortgage brokers are helped by mountains of useless paperwork because it is easy to hide important things in a mountain of unimportant ones.
Now, Congress wants to create landmark legislation that will create even more paperwork.
The bill by Durbin would in effect create a moral hazard. It would encourage bankruptcy because it would allow bankruptcy courts to renegotiate artificially terms and rates with banks. That means someone in bankruptcy could end up with better loan terms than a borrower that makes their payments on time.
These are the things we need to be talking about.
#22 – I may have misinterpreted your comment, but why should the governement be responsible for bailing speculators – or moderating them for that matter? They were some of the reasons prices of homes were so inflated – but also the reason that Builders did so well.
Texas and Oaklahoma are doing surpisingly well. Hardest hit has been Florida and California.
Layoffs this time of year are not good. Both the man and I work in the residential home building market. We are keeping our fingers crossed and hoping to survive another round.
The American dream, a house for us, will definately have to wait!!!
But we are very thankful for health, hapiness and wonderful families.
Re: PurpleHaze
Right on the money. We are looking at inflation and job losses. Can someone tell me why the Fed would keep cutting interest rates? Seems like this type of economy would benefit from higher interest rates.
I’m young and my wife and I are starting a family (in California) and its not hard to see where this is going. All the politicians (from state to federal) are doing their best to prop up the market somehow or *poof* goes their tax revenues. Housing out here is a ponzi scheme… fueled by creative financing that would allow sellers to sell to anyone with a temperature of 98.6 degrees.
Only 16% of Californians could afford to live in a home in California.
If government bails people out then essentially the tax payers, people who pay their mortgages on time, are paying for those that don’t. How does that make sense?
This is all political. “Bailing people out” is nonsense. These people can’t be bailed out. They are in over their heads. No one can fix that. That is not something the government can solve.
Banks created loans that they shouldn’t have, mortgage brokers exploited that situation and put people into loans they shouldn’t have, and ultimately irresponsible people put themselves into loans they shouldn’t have. There is no bailout for that.
The mortgage crisis is very complicated and with a lot of moving parts and it is dangerous for those that don’t understand it to comment on it let alone make policy around it.
Savings and Loan’s gave money to anybody for anything and we had a mortgage crises. Now Banks have been giving money to anybody for anything and we have another mortgage crises. It’s and easy way to “print money” and devalue the dollar. The real losers are the ones who have been saving money or investing in American companies.
On another note, sad that people only think to turn to prayer when things are going rough…..
Y&R, Andrew Busch who is a forex specialist asked the same question. In fact, he inspired me to write this.
The way I see it is that Bernanke is in over his head which is down right scary. He frankly doesn’t understand his role. Greenspan, through hubris I believe, became fixated with the internet bubble and that lead to disastrous results in the late nineties.
Bernanke, through inexperience, is fixated on the housing market and that is why despite overall good economic numbers he is cutting rates. He will very likely spin this economy straight into inflation and after he is done cutting rates he will start raising them and likely spin it from an inflationary period right into a recession. He will essentially, in my opinion, do the inverse of what Greenspan did in 1999-2001.
Mike: Clarify this please. Thanks.
eh, how is Andy’s trading going? CNBC’s expert. Hmmmm.
There is nothing complicated about the Mortgage crises. Just look at real estate prices starting with California. How did the buyers get the loans to pay those prices? Why did the banks not access the Risk of these costly loans on overpriced houses?
BINGO:
Because most people that don’t understand the crisis, only look for villains to blame. Of course, my business is the number one villain. (mortgage brokers that is) What happens when those that don’t understand comment on the crisis is that a politically correct narrative is created.
If you notice reading any major newspaper, you won’t ever see anyone blame the borrowers for any of this. Mortgage brokers are blamed, banks are blamed, and Wall Street is blamed once in a while. No one blames the borrowers even though ultimately it was the borrower that signed up for a loan that they couldn’t afford.
Also, no one blames Congress even though they were a participant just like everyone else. Again, the main reason it was so easy to rip people off is the mountains of paperwork in the process. That is Congress’ responsibility. They created an obscene amount of regulation that banks dealt with by creating disclosures. No one wants or knows about this part of the crisis. Thus, we get naive commentators encouraging more regulation. The last thing we need is more regulation. Think about it. My industry was hyper regulated five years ago and still we figured out how to make ridiculous loans. In fact, the regulation acted as a conspirator in the scam. Now, naive folks are encouraging Congress for more regulation.
Look everyone is fixated on the term “predatory lending”.
Guess what this term has no definition.
H.R. 3915 is the anti PREDATORY LENDING law. They are creating landmark legislation to deal with something they can’t define. The reason Congress is moving forward so confidently is because naive folks are encouraging them.
Again, I encourage everyone to read my piece.
That gives the nuances of the crisis and how the response is dangerous. If we don’t have a rational debate on the crisis and the response ultimately there will be legislation that will make the industry drown in paperwork. It is already near impossible to function, and anymore paperwork will make everyone just simply drown.
Not arguing with you, but 100% interest loans so the “buyer” can afford the payments? (I have “buyer” in quotes, since if you never pay on the principle, you’re not actually buying anything.) ARMs? Ok to a point, but if buyers weren’t alive to see Jimmy Carter mess up the economy, they won’t remember the 20%+ short term interest rates and calculate possible payments if things go wrong. Location won’t help if you buy more than you can afford.
And sorry, but I’m going to repeat this. Everyone here with kids (or who thinks house prices always go up) needs to have them read Extraordinary Popular Delusions & the Madness of Crowds by Charles Mackay.
Sorry, not arguing, just seems to me that people seem unaware of the problem of over-paying and under-financing a home, no matter the location.
Right.
And how many who used to hold mortgages in California have cashed in to either buy or build in Mexico?
I pity the next governor of California.
Back in 98, we bought a home in Berkeley below its inflated market value (nearly 75 per cent below to be exact). Rule number 1: Buy Low.
Equity in the home has gone up 8 times since.
So now it is time to observe Rule number 2: Wait for the bottom to fall out completely and keep a dumpster full of cash to buy somebody else’s pain-AGAIN, below market value.
Owning a home in America is not a social issue.
It is a privilege one establishes on the basis of earning, saving, and financing in alignment with sound business principles.
It is based on merit. And merit begets more privileges.
Funny thing about markets- of any kind-
“they” wait for the players involved to demonstrate their weaknesses, and then beat them to death with them.
Realtors and lenders who are learning this lesson again failed to learn it the last time around.
Note: Main difference between Greenspan and Bernanke (both are dimships in my opinion) is that Greenspan propped up the stock markets and Ben “Burn Me” Bernanke is trying to prop up a housing market. Greenspan had the luxury of stealth buying while Bernanke can’t buy a clue with his “strategy”.
So the housing market has turned from its greed mask to its fear mask.
Buy all the way to the bottom and average your costs. Offer 30 per cent under the sale price. Mortgage up and offer cash at closing.
Less money now is worth more to the seller than a puffy sale price they might get tomorrow. If the seller is “distressed” push even harder. They will thank you. So will their banker.
Keep an eye on the tax liability and negotiate that cost out of your buying price.
Bleed the “cost of improvements” out of the sale price too.
Most of the time these are used to inflate the sale price but count little in the way of added value, even though the realtors love to peddle this crap.
And if the house did have work done to it, find out if the labor was Mexican or USA. If it was Mexican threaten to walk away— and watch the seller squirm, then call you back. But it will get all the “improvement” fluff off the table.
Look, the borrower’s role is just one aspect.
Here is a name, Lew Ranieri. I bet no one here has heard the name even though he played a critical role in the crisis.
Yes, there were irresponsible people that got in over their heads, but there are always those sorts. To understand the crisis people need to know what dynamics were in place in order to put those people into the marketplace.
That is where Lew Ranieri comes in. He created mortgage backed securities. That created a whole new market for loans, and ultimately irrationally exuberant traders on Wall Street created a market for loans that ultimately went to irresponsible people.
Like I said the dynamic is very complicated. You all think it is simple but that is only because you witnessed it from the outside.
No one.
How is it possible to make this statement?
Most people are you happy. Look, I have been commenting on the New York Times vis a vis the mortgage crisis lately and every single article is how do we protect the consumer from the evil mortgage broker. Do you think the MSM wants to know the truth?
That name’s been tossed around in popular business media for at least 4 or 5 years, Mike.
This thread is turning out to be like you last one where you were the “only” one to know anything or to have written about it on your blog.
Please. You have some important things to say, but this “no one knows” or “no one else has heard of” is absurd.
Stop putzing.
Image: Bear1909 puttin on his mukluks and firing up the snow plow in preparation for another Volpe blizzard.
uh…yes? uh…no? I don’t know! But I know somebody who does! I’ll just call Mike Volpe!
And the little people will be saved!!!!
C’mon, Mike.
Have a bite of this reality sandwich: the MSM does not know whether it’s collective orifices are drilled or bored.
Go against those windmills if you must. But how happy does it make you shooting fish in a barrel? It’s lonely out there doing that kind of stuff. And it makes you say things beginning with words like: “No one knows” “no one else” “no one sees”….
It’s unbecoming to say the least.
Lew Ranieri has been around since the eighties, so I don’t know how long his name has been tossed around however his genius was in the mid eighties. Business magazines have talked about him for a lot longer than four or five years. He was the subject of a best seller called Liar’s Poker. So, maybe you have heard of him for four or five years which is peculiar since he has had a much lower profile in that time period, however the business community has known about him for a lot longer than that.
Excuse me if I just a little more emotionally attached to this topic than you, given that H.R. 3915, depending on its form, could eliminate my industry. This isn’t about threads, and frankly at this point you are the arrogant one with all due respect. I have worked in mortgages for nearly six years, so if you think you know more about this topic than me also then that is the height of hubris.
#41 that isn’t the point. The New York Times still has plenty of influence and they are throwing their weight around the narrative that evil mortgage brokers and banks need to reigned in and by reigned in more legislation.
Look the New York Times has thrown their support behind a bill that would give incentive to filing for bankruptcy. This isn’t merely about commenting on the ridiculous. If this bill passes we will have a lot more people filing for bankruptcy. That isn’t funny that is scary.
hooooo boy!
Again, it is easier to be cavalier when it isn’t your career directly affected.
Yes, Mike. The point was, in case you missed it, is that he has been in the popular business media for at least the last 4 to 5 years, which suggests that *somebody here* has heard of this Gordon Gecko wannabe.
And if you feel this emotional about this issue, perhaps you should disclose this to your clients.
My career is being directly affected. But not in the direction yours is being affected. CHA-ching!
Make money in both directions the market takes, Mike. Rule #3.
Lew Ranieri hasn’t been in the news for four or five years. He has been in the news for over twenty years. He hasn’t been in the news much in the last four or five years, which indicates that you frankly were making it up.
Ranieri was no Gordon Gekko wannabe and in fact, he is a genius. His contribution to the crisis was the creation of mortgage backed securities. He invented a whole new investment vehicle. Gordon Gekko invented nothing. Again, you are portraying the height of hubris. You are most likely making things up. If you had heard of Ranieri, it would probably not have been in the last four or five years, but in the early nineties, and certainly what you would have known of him, would have been from the late eighties.
Mike, if you were talking about me, admittedly, I’m no pundit. However, this slump in the housing market does affect me greatly as well as my new family. And I don’t even own a home. Read my post.
Its all about Mike, apparently.
BTW. I think I am going to step out the St. Jude statue here shortly. Any one want one while I’m out?
It affects everyone, however that is the housing crisis, I am talking about the legislation that will be in response to the housing crisis. That won’t affect you as much as me, besides having to sign 200 documents not one hundred.
Te Queries , QUE?
And any time you feel the pain, hey, Jude, refrain
Don’t carry the world upon your shoulders
Well don’t you know that its a fool who plays it cool
By making his world a little colder
geez, cmon… the hula skirt girl on the dash is the only way to go…. and on top of your computer.
Oh. I thought you were talking about making a profit on the time you spend doing things to make money.
Ya, Mike. Time to get a gummint job. You seem to prefer redundancy, no recourse for the pain you endure, and you do a lot of paperwork.
Let me ask you a serious question, Mike: what are the other guys in your business arena doing to fight the good fight against Turban Durbin?
Tried that. First, she cramped up and I couldn’t see. Then, it was carpal tunnel.
With all due respect, by the time a loan is finished there is more paperwork than a volume of an encyclopedia. Now, imagine a good mortgage company closing 100-500 loans a month. Do you see how that becomes almost unmanageable. It is easy to talk about mountains of paperwork when you don’t have to deal with it. You think you deal with it when you get a loan. That is one tenth of the paperwork the mortgage company holds on the loan.
The whole industry is universally against H.R. 3915. Some versions will eliminate Yield Spread Premium which is a tool for making money. In the what’s in it for me portion, we are against that. The industry doesn’t know much about the Durbin bill because we aren’t affected. I assume that banks are using every bit of their lobbyists to lobby against that. H.R. 3915 became a huge internet sensation, my blog grew exponentially mostly from google links about it. Thus, that has a voice on the net, but it isn’t known in the mainstream.
Mike Volpe wrote, “If you notice reading any major newspaper, you won’t ever see anyone blame the borrowers for any of this. Mortgage brokers are blamed, banks are blamed, and Wall Street is blamed once in a while. No one blames the borrowers even though ultimately it was the borrower that signed up for a loan that they couldn’t afford.”
While I agree that borrowers deserve their share of the blame, I would ask this. Who’s responibility is it to determine whether a borrower should get the loan?
I submit that banks, and mortgage companies solicited (just as credit card companies have and do) customers they knew couldn’t repay the loans because the lender knew they could, in the interum between when the loan was originated and when it became unaffordable, sell the loan to another investor, who sold it to another and so on. At each step they make their comissions and profits, until ultimately the original loan is actually owned by a large number of individual investors who will bear the brunt of the cost both in losses to their investments and in bailing out borrowers who should have known better.
Hey don’t mock the St. Joseph statue. I got one in January before we put our house up for sale in Feb. We had l7 offers, all for over the asking price and my agent (who is a family friend and normally does extremely high end-at least 1.5 million) had never seen a house sell so quick (1 day because we looked at all the offers) and with that many offers in a “bad market”. With the gains on the house we were able to pay cash for the Volvo XC 90 and still have enough left over to put down 250K for our house when we move to Manassas at the end of the month. I would get a St. Joseph statue again and I highly recommend it. In fact my agent dug him up and took him to another property that she had listed that wasn’t selling, two days later she got 2 offers and he has been making the rounds since. He is packed in plastic wrap with our “dirt” from our home on it. ACHefty-look into the kit. It worked miracles for us!
Ironically enough for someone like me who’s 24 and just about to get out of law school, might be a great time to get into the housing market. Its slow though even here in SAn Diego
Radio,
I said everything you are saying, the whole process worked in symbiosis.
That is my point. There were always irresponsible borrowers but they didn’t always qualify for loans. That is where mortgage backed securities come in and all of those other things that most people don’t have any idea or understanding of.
Here are the five players.
1)borrowers, the borrowers who took on mortgages they couldn’t afford
2)the banks, the banks who created programs for irresponsible borrowers
3)Wall Street, the Lew Ranieri disciples, who created a market for borrowers who are irresponsible
4)the mortgage brokers, who took advantage of everyone elses irresponsibility and irrationality
5)Congress, who put in so much regulation that it was easy for scummy mortgage brokers to take advantage of naive borrowers.
Q: I am trying to sell my home. I have been told to bury a statue of St. Joseph, but it has to be in a specific location on the property. Can you tell me where it needs to be buried?
A: What you have been told is a superstition, which is a violation against the First Commandment (CCC* 2110). Burying statues to sell your house is not an approved Catholic practice. If you want to ask St. Joseph for his intercession in selling your house, that’s fine. But don’t go burying statues of him for this purpose.
source: http://www.catholic.com/thisrock/2001/0110qq.asp
*CCC=Catechism of the Catholic Church parag. number
I live in Stockton, CA. I don’t need the national press to know the housing market is in trouble.
1 in 31 homes in San Joaquin county are in foreclosure. That number is expected to rise.