One Easy Prediction! Long Beach

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One very easy prediction one ca make for today and the next few business day is that whatever our Chief of State and Bernanke will say will create ripples in the financial world, which will, in turn effect our real estate world locally.

Many people are desperate to get an idea, a glimpse of hope and light at the end of the tunnel to see where we are going. Many people hang on the comments of the Federal Reserve and try to interpret their meaning. Add to the the president speaking and leaks about how he plans to save people as his ratings dip further, should make for confidence boost in the financial market.

More to follow on Tuesday when we see how the market reacted to our leader’s speeches. So my prediction, the market will most likely go up on Tuesday from the boost and pep talk.

Collector Car and Real Estate Trends, Long Beach

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Boy what a difference a year makes. Last year, the market was getting so calmed in Real estate, I turned my attention to the collector car market and found some interesting similarities.

A year ago, muscle cars were taking off, igniting a frenzy. It reminded me of the real estate market of a few years ago. Fake cars were put on the market and getting the same high prices as the nice ones. Almost any Camaros fetched prices RS/ST were going for. Any kind of ‘Cudas were trading near the upper scale of the top models. With that said, rare models with rare colors and top conditions should be worth something as we saw in bewilderment the sale of this 1971 Plymouth Hemi ‘Cuda Convertible that sold for $2,200,000. And one sold for even higher. For one thing, I couldn’t understand the surge in prices for muscle cars. They very rarely have international racing auras, don’t handle well, don’t break decently but have great lines and big engines going for them.

So what is happening a year later? Rare cars still yield quite a bit but buyers have shunned the fake ones. This is a good thing. The same thing in real estate, no one is really taken in and no one is jumping in to buy homes at any price.

However, the upper segment of the real estate market is still holding well. Even if it does lose 10 to 20% in the future, it still has appreciated well, IF you bought a while back.

What has been interesting in both market is that, whatever is truly genuine, truly old, truly in a good condition and has ample of documents, still trades and sells for decent prices in either markets. The ones who have suffered are the homes and cars that were made up too quickly, upgraded without second thoughts and rushed onto the market without really understanding the market. The common denominator for this segment is plain old greed.

But this year, no one is rushing to buy Camaros at $90,000 of last year’s pprices. The housing market does not see a rush to buy a 1500 sq ft, 2 bedroom, 1 bath bungalow at $1,000,000 anymore. However, the collector car high end segment is still doing well as the last auction showed for this  1962 Ferrari 330 TRI/LM Testa Rossa which sold for $9,281,250 and the buyer went on to buy another $10,000,000 worth of cars that same day. The stratosphere is still holding quite well in both, indeed.

Rick Carey over at Collector  Car Market Journal posted a great spreadsheet that looks at overall numbers. The trend is down a little and less car sold. Still higher end have not run into the same problems as the lower end.

If trends in the collector car are anything to take into consideration, than the real estate market should continue it’s adjustment to reflect asking prices versus inflation. What I have found is the collector car market went through under a year what took the real estate market 5 to start becoming healthy. Maybe there is some trend to watch for in the future.

Interactive Real Estate Spotting, Long Beach

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For the last day of August, those who missed it can go see a nice page from the  New York Times that shows an interactive map of the most important real estate markets in the U.S.

What I like about it besides the interactive part was the depth of study behind it. It not

Please watch the video with David Leonhardt who does a great job explaining the different types of numbers and agencies who play around with statistics.

If you are having a hard time with terms as nominal and real terms, go check  investopedia.com. A good website that will explain all these puzzling financial expert linguo.

Thanks  Calculated Risk.

Borrowers, Lenders, Reality Check and Saying Sorry, Long Beach

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I wanted to expound on a post  Calculated Risk came out with yesterday.

CR says we shouldn’t blame the financially inept for asking for more money than they could handle. I tend to somewhat agree with this but I do have reserves. For one thing, we have fast become a society where saying sorry gets you out of trouble most of the time. The problem is that too many people do it and never learn from it. I just hear sorry everywhere now.

Case in point. A person was pulling out of a parking spot without looking behind. She bumped this other person’s car. I was in third position, witnessing it. What was striking is the first person never stopped to assess eventual damages or to excuse themself. At the next stop sign, both people were next to each other. I could hear the person who had bumped talking to the first car. What I heard from the first car was troubling: “I said I was sorry.” And that is a very, very scary thing to hear from someone driving on the road with a big vehicle. It almost sounded childish. It sounded like a kindergarten play where the teacher had taught this person to say sorry but never pushed through the reasoning on how to not get into a situation like this in the future.

Without going into the dilemma of “punishing” borrowers for overextending their assessment of their financial capacities, they should still be more or less held accountable. Or else, too many people never learn and walk away Scott free. The ones who should really be accountable are the ones who have pushed the wrong loans without due diligence. I agree with CR that the loan officers needs to be held accountable. Heck, why don’t they have fiduciary duty like Realtors, is beyond me, considering the impact of this mess.

The downloadable PDF files makes for an interesting reading. It goes into details about what types of people easily find themselves in trouble. I loved the part about lacking a sense of humor. That is one of the first traits I look for when getting to know someone.

They’re Saying The Word Drop, Long Beach

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The  New York Times actually did it. The used the word drop in the same sentence as home price. I have been wondering for a while when someone would actually utter these words together. Thanks Calculated Risk.

After having endured months of bad real estate news, followed with equally horrible mortgage problems and pretty much doom, now comes the drop in price. I don’t know if you are on top of prices but we have seen prices drop a little for a little while now in our backward. It used to be the asking price that as high and the selling lower. Now, many homes come on the market with lower prices than those I would hear six months ago.

Though the price drop was quoted as being around 1 to 2%, what was equally interesting was to hear that experts” believe these drops could last until 2009. And this is where another debate rages, how long with the downturn last? Most enthusiastic Realtors believe it will pick up at the end of the year. My question is, pick up from where? We had unsustainable home price compared to inflation between 2001 and 2005. We are only starting to see a measurable slowdown now, so how can it pick up? I am talking on a purely economical aspect.

Like many on the blogosphere have said, even if housing prices dipped 30%, those who bought 10 years ago would still make a profit. The problem really is those who bough in the last years. They somehow need to hold on a few years before making a profit.

Read the entire  article. It makes for good points

The Constant, Your Inner Value

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This coaching trend is really growing on me. I like it a lot.

We have been discussing a few things that, I feel, can only help in the personal development of anyone wanting to improve their life and find out what they should be doing, would like to do or just get a better idea of where to go.

One thing I notice everyone struggling with, me included is one’s inner value. How do you become aware of it without feeling pompous? I believe this effects particularly women. Women struggle a lot in order to achieve a successful business life and try to maintain what is expected of them to still be feminine and take care of the kids, if any, etc. The 55 to 70 generation is still struggling with saying: “No”. I thought the 30 to 40 generation would have an easier time and depending on family up growing and what part of society they were born into, some still struggle.

Obviously, these are wide and huge generalizations. I meet plenty of people from these generations that understand who they are and their place in life. Neither following what is expected of them or rebelling against society. Some have found the right balance by saying no at the right time for the right circumstances.

Here is a little article I found on figuring out one’s inner value. I forgot where I got it from but this can help anyone.

One thing for sure is your inner value is a constant. It doesn’t change. It is who you are and determines what you create in life. Not the other way around. What you create should not be confused with your inner value.

“Your Innate Value Worth

Though much of who and what we are changes as we journey through life, our inherent worth remains constant. While the term self-worth is often used interchangeably with self-esteem, the two qualities are inherently different. Self-esteem is the measure of how you feel about yourself at a given moment in time. Your worth, however, is not a product of your intelligence, your talent, your looks, your good works, or how much you have accomplished. Rather it is immeasurable and unchanging manifestation of your eternal and infinite oneness with the universe. It represents the cornerstone of the dual foundations of optimism and self-belief. Your worth cannot be taken from you or damaged by life’s rigors, yet it can easily be forgotten or even actively ignored. By regularly acknowledging your self-worth, you can ensure that you never forget what an important, beloved, and special part of the universe you are.

You are born worthy-your worth is intertwined with your very being. Your concept of your own self-worth is thus reinforced by your actions. Each time you endeavor to appreciate yourself, treat yourself kindly, define your personal boundaries, be proactive in seeing that your needs are met, and broaden your horizons, you express your recognition of your innate value. During those periods when you have lost sight of your worth, you will likely feel mired in depression, insecurity, and a lack of confidence. You’ll pursue a counterfeit worth based on judgment rather than the beauty that resides within. When you feel worthy, however, you will accept yourself without hesitation. It is your worth as an individual who is simultaneously interconnected with all living beings that allows you to be happy, confident, and motivated. Because your conception of your worth is not based on the fulfillment of expectations, you’ll see your mistakes and failures as just another part of life’s jo! urney.

Human beings are very much like drops of water in an endless ocean. Our worth comes from our role as distinct individuals as well as our role as an integral part of something larger than ourselves. Simply awakening to this concept can help you rediscover the copious and awe-inspiring worth within each and every one of us.”

After a Short Sale or Foreclosure, The IRS. Long Beach

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Another looming problem no one seems to tackle at the federal level is what happens next year when all these people who think they walked Scott free from their bloated loans?

Remember a few weeks back, we talked about what happens when your creditor OKs to forgo the extra $100,000 on your $700,000 loan? You know the IRS will see it as an income even if you have nothing to show for, period. So far, not one word on how the IRS will collect this from the same people that got themselves in trouble the first time.

The New York Times  talks about a little here but offers no real insight as to how the problem will be treated.

And with numbers like these: “The Center for Responsible Lending expects that 20 percent of the home loans made in 2005 and 2006 to people with weak credit, commonly called subprime loans, will end in foreclosure.” Yikes, that’s a lot of smackeroos the IRS will try to recoup next fiscal year. Obviously some will settle with them others will try to fight. One thing is for sure, Uncle Sam will be hungry.

Can you bleed a rock? No, but I’m sure a lot of people will be a heck of lot more responsible in the coming decades. Take into consideration the last few generations or so. Take those that lived through the great depression. They lived their lives without owing money and usually paid off everything quickly. Then take the next generation. Woohoo, party time! Yeah, Baby, let’s have fun. Loans, more money from the banks, credits, schcredits! We’ll pay later and the inevitable? Where we are now. So are we facing another generation that has learned the hard way? Most probably. I am happy to have never had debts and will always continue this way.

Watch for this to be next year’s big news hit. Hey, I’m on to something. Pretty soon will have a reality TV show about the News’ greatest hits…

More Mortgage Woes Hit The Fan, Long Beach

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I think this warrant a Breaking News post.

From  Newsday, a mortgage broker gets 2 years in prison for stated income fraud. If hindsight is 20/20, this had to happen. Is it only the beginning? It could surely explain why a lot of brokers have been feeling the heat lately. I’ve noticed less calls and more anxious people.

Thanks Calculated Risk.

Last Neighborhood Design Workshops, Long Beach

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I kind of missed that one but the city will hold the Neighborhood Design Workshops.

The City of Long Beach is sponsoring a series of neighborhood design workshops to develop ideas for the Community Livability Plan, which will guide quality-of-life improvements for neighborhoods affected by the 710 Freeway. The last meeting will be held at 6:30 p.m. on August 29 at Cabrillo High School, 2001 Santa Fe Ave. For more information, call 562/570-7100.

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One thing that bis captivating me with the latest news is the trend and where the industry seem to be evolving into.

In one Seeking Alpha’s post recently,  David Roskoph draws some parallels with the great depression but also points that these are different times.

Indeed, these are different times but we still have plenty of people who do not understand how far they can stretch themselves. And who could blame them when watching TV or the news, they see how rich seemingly easily some people got.

He points out: “Such an unprecedented number of foreclosures will not only disrupt the financial order but perhaps the social order too. In as much as all those new loans invited many of the “have-nots” to become part of the “haves” through home ownership. That is, after all, the definition of a sub prime mortgage.” And some of these have-nots briefly turned into theoretical haves, are becoming have-nots again. Worse yet, many people still believe the system will come and bail them out.

The implication of the mortgage industry fallout is intricate and fascinating. Who could have imagined this industry could have chipped away confidence locally and abroad? Who could have imagined the far reaching implications?