Monday, September 15, 2014

Mortgage rates are well up today. I'd say the aggregate is in the 4.20% range.

Slightly more than 47% of the properties in my city are now in markdown now. That is almost a 25% increase since September 2. Things are slowing fairly sharply.

With how many there are - this might be the first month mark downs from the previous month didn't clear before a new month started.

Saturday, September 13, 2014

What's up with that house?



This one I got today. Those stacks used to be painted gold which I'm sure made the neighbors plot to kill them.

The one below I got in Monterrey last month and I never posted it. I've never seen a roof like this.







Friday, September 12, 2014

Good luck unwinding that.

I've really gotten to the point where I'm so tired of people saying the Fed is going to raise interest rates - that I give up. Raise them already. I dare you.

A few days ago mortgage apps hit a 14 year low. And when I read the reason I thought it was complete bullshit. I saw the small bump up in interest rates (4.10%), but it only lasted a few days. All month I've been able to find a rate under 4%. If a few ticks up was enough to cave the market that badly - hold onto your hats. Apps dropped 3%, while refi's tumbled 11%. If rates go up much more they are going to tumble 100%.

All summer I've been posting about the rise in price markdowns, which seem to be consistent with the overall market. Just a week ago I posted that fully a third of the properties in my city were under markdown. Read: More signs of weakness in housing. Southern California seems to have about the same ratio of markdowns.

"The number of homes with reduced asking prices has risen sharply in recent months, a reversal from last years sellers market, when list prices seemed more like a floor than a ceiling.

In Orange county. the regions priciest market, about  one third of sellers have been forced to cut prices, according to data from real estate firm Redfin". Here.

All I know is - 17% of homeowners are still underwater. I am "technically" one of them. And prices have plateaued.

Those 17% in all likelihood have resets coming. I know because when I bought my house you couldn't get a mortgage without a reset. Mine was 10 years. My reset was in 2016.

Until recently I haven't thought this was much of a problem because these people have been paying a long time, and some I think are resolved to paying 6-7% interest. I know a guy who is still paying 7%. If you are still in your house right now, you have a LOT of skin in the game. So I'm not sure how troubled I feel about this. For now.

If rates start ticking up though, psychologically it is going to impact those 17%. Some of them might get tired of fighting.

I would be surprised if they did raise them. But the Fed is in a really fucked position. Rates have been low for so long - a generation might start to think this is normal. When rates go up -  it's going to be a really painful adjustment period.

Discuss.

Last night Mr S. and I were talking and I said - hey, did you hear that Concord has an even better MRAP vehicle?

Him - No. What's it called?

Me - A MAMBA!

Him - Is that a South African vehicle?

Me - Uuuuuum. Yeah, I think so.

He stops and says - that isn't surplus. When did we start buying military stuff from South Africa? Which I have to admit is a really good point. So good - I had to go back and read the article to make sure I wasn't being a spaz. I guess it's built on a Unimog chassis. Which is a beast of a machine. The only reason I know this is because I got one this summer in a parking lot.

I know of three cities in the Bay Area that have gotten "surplus". Redwood City, Concord, and San Jose. Who just gave it's MRAP back.

In other news. The San Diego School system also has a shiny new MRAP. I mean, if it's for the children.... Said in the most sarcastic way.

It's not that I don't want the police to have every tool they need to do their jobs, but the crime in these areas just do not warrant the immense military force that these vehicles provide. (well, I don't know about San Diego)

Will the day come they wish they had one. I'm sure it will. But those instances are so few and far between that the maintenance costs are going to eat up any benefit. I mean, so far they have been just rolling them out in their parades.

UPDATE: Vice News is out with this story today with pictures! The San Diego school district basically says they didn't want it. It was kinda forced on them. It's basically an armored ambulance at this point.

Also- I guess the MRAP was always a South African Vehicle, but I thought all of the ones the US used were made from Osh Kosh. Unlike the MAMBA.

Can't wait until I start seeing this.


From Autoblog.

Wednesday, September 10, 2014

I have writers block.

Friday, September 05, 2014



50 shades of beige.



You might as well settle in, because the next couple of months you are going to get a lot of this. I thought the trees would generally all cave at the same rate. Now things are getting to the level where some of them clearly are not coming back. Most of these are just dropping leaves - but week over week the weak ones are noticeably going belly up. It's going to be a spectacular year to be a tree trimmer.





This one I'm pretty sure is not coming back. When the pine trees get that orange I don't think it can recover. But I'm usually chopping trees out. So I'm no tree expert. All I know is a golf course that had one this color just chopped it down yesterday. I kinda thought they would wait to see if there were any sings of life come the rainy season.





Wednesday, September 03, 2014

Every day brings a new shade of beige.



I've been meaning to get you more shots of crazy dry things are. Problem is - I can't keep my windows clean to save my life. And all of the sepia makes the lighting weird in general. Everything is sort of an olive green color now. And it isn't like all the trees are dying. But you will be driving down the road and see a giant 30 foot tree that clearly looks dead. The trees above might even be 100 feet tall. A single story house is probably 20/30 feet tall (roughly), and you can see how they tower above the homes. Every week more of them pop up. I'd say most of the trees are half defoliated now. By fall... well... there might not even be a fall. Even by California standards. By contrast- this is how the world looked mid November of last year. The trees were just starting to turn, but I got the best shots of the vineyards ever. It was painfully beautiful.

We don't normally get these colors until mid October. And all of these pictures were taken in cities where  they are getting at least minimal water. Some of the stuff on the outskirts of town in the natural areas are pretty crazy.

Evergreens oddly seem to be taking it harder than the some of the other ones. I generally think trees can take a lot of pain, but some of them I'm not sure if they are coming back now. It's going to be an epic season for the trimmers this winter. I'm pretty sure all the trees at least think they are dying because some of them are doing things I've never seen before. Trees that have never needed to before are spitting out an insane amount of seed.



This is in Berkeley.



I'm not sure this one is coming back. It's some kind of pine tree.





Fall colors in September.

Tuesday, September 02, 2014

Fed finally admits they created a liquidity trap.

Fed: US consumers have decided to 'hoard money'.

"One of the great mysteries of the post-financial crisis world is why the U.S. has lacked inflation despite all the money being pumped into the economy.

The St. Louis Federal Reserve thinks it has the answer: A paper the central bank branch published this week blames the low level of money movement in large part on consumers and their "willingness to hoard money." The paper also cites the Fed's own policies as a reason for consumers' unwillingness to spend..
"

I first posted about this in May of 2013. Also here, because if you own anything you understand completely why this is happening.

More signs of weakness in housing.

Things are going so swimmingly well that mortgage rates hit a new low today. 3.829% /sarc

The last lowest reading a few weeks ago was 3.87%. Also - fully a third of properties for sale in my city now are under price reduction. Although the reductions have moderated. Most are only a few thousand dollars. Which means agents think the properties they are listing are close to the right price. I'm guessing the market doesn't think that because sales have really slowed.

When I told Mr S. the above story he said - why would you bother marking a house down a couple of thousand dollars? When you get down to it - anything under five grand is a negotiating issue. Which he's completely right about. This made me go over and look at these properties more closely to see what the pattern was. Maybe they had all hit the magic 30 day mark and that will trigger the agents to try to get some new traction.

To my shock - a bunch of the houses hadn't even been on the market that long. Some as low as 13 days were being marked down. Mr S. thinks this shows a bit of seller panic. Which I'd have to agree with.

This also tells me that world events are less at play with the lower mortgage rates than actual housing weakness. I'm guessing it is some mix - but people rushing into the safe haven of the US is only part of the picture.

In other news - the world seems to be waking up to the fact that low mortgage rates are fucking the market to kingdom come. I first talked about it in April with the article Low interest rates will alter the housing market for decades.




Monday, September 01, 2014

I tried to get you some interesting stuff this weekend. The traffic was just too crushing. I haven't seen traffic like this for a few years. The kind where it takes hours to go a few miles. And it was everywhere. I almost made it as far as the Richmond Bridge and turned back because there was an accident on it. Took me an hour to ride the back roads through Berkeley and Oakland. The whole weekend I've had to take back roads.

So... as much as I like to entertain you... sometimes it just doesn't work out.

Friday, August 29, 2014

Just when you thought you just lived through some of the craziest shit ever...... now the whole world turns Baghdad bob. And you are stuck with one of the most "JV" Presidents ever. Doesn't he look like a smaller man every day?

Monday, August 25, 2014

We are now at a tipping point.

Supply of homes for sale rises to 6 months from 5.6 months. From MarketWatch.

Six months is the magical line between a healthy market, and a market that is blue-hu-hu. But really - we already know the answer to this. July had some of the most favorable mortgage rates since the beginning of the recession. It's really hard to figure out how this works out. There is some school of thought that bond holders are tired of not making money on high yield bonds and that the only reason rates are so low right now is because of conflict in almost all other parts of the world. You can see how meager home sales are now with rates very near 4% give or take a few ticks. Any rise in interest rates will hurt buying activity. Vaporise refi activity. Falling prices will follow. And the Fed has no tools to stimulate whatever may follow. 

So sack up. I think things are going to get a little bumpy.


Old Timey Ford - retread.



Normally I don't re-post cars that have already been on the blog. That would become boring. But I had to make an exception for this truck. This thing is so hard to get good shots of. Red is a really hard color to color match right in photos. It has a ton of stuff going on. Red on busy is a hard combination. Last time it was out in the sun - so that took the degree of difficulty to a whole nuther level. Seen at Goodguys. Video here from 2010.













 
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