Posted on 03/12/2008 2:47:51 PM PDT by BGHater
|
In a large, featureless convention centre 40 miles east of Los Angeles, more than 1,000 people have gathered early on a Sunday morning.
From the stage, they are addressed in earnest by a man in tuxedo and bow tie, and they can watch the proceedings on giant video screens on either side of him.
He is preaching property, and although this auctioneer's high-speed patter sounds more like a cattle auction, here they are bidding for homes.
More than 100 houses are up for sale here and every two to three minutes a property goes under the hammer.
Similar auctions of repossessed houses are taking place nearly every weekend in California, where banks are cutting their losses from millions of dollars of bad debt.
Care required
There are bargains to be had. One man says he paid $375,000 for a house valued at $616,000.
 Estate agent Julie Bruckner says homes need love
|
Lot 132 was a five-bedroom family home with a pool and three-car garage on La Salle Circle, Corona, a pleasant middle-class suburban community east of Los Angeles.
It was expected to fetch some $400,000. In the end Cornelius Foster and Debra Moore paid $500,000 for it; still less than the $700,000 it was originally valued at.
"We're very excited," Cornelius says. "It's got a pool and we're looking forward to getting in and fixing it up.
"I'm smiling today."
Yet they are also aware of the house's history.
"We feel bad for the people that were there before," Ms Moore says.
It was a reminder of how, behind many a good deal, there often lies a tale of personal distress.
|
 Jeannette Lovell says prices have fallen fast
|
In one house on La Salle Circle, two days before its auction, an estate agent's sign outside proudly proclaims "selling the American Dream since 1969".
But, as estate agent Julie Bruckner tours the property with its chandelier in the living room and a huge walk-in closet upstairs, she is well aware of a poignant irony.
"There are so many in this area that are vacant.
"This home definitely needs some love, and a family that can give it the TLC [tender loving care] it needs."
Graffiti and crime
In fact the Corona area has the third highest rate of foreclosures, or repossessions, in the United States.
 "Selling the American Dream"
|
On La Salle Circle at least three properties were empty, awaiting sale.
One local resident is Jeanette Lovell, a British expat.
She and her husband are not in mortgage difficulties, yet she was still worried about her own home's value.
"We may have to relocate for my husband's job," Ms Lovell says.
"And I know that our house has lost $150,000 in value in 18 months - if we can sell it at all."
These are the ripples of the housing crisis: just 2% of America's mortgages are actually in foreclosure; just under 6% are said to be "delinquent", meaning payments are late by 30 days or more.
Yet Cindy Robinson, another resident of La Salle Circle, predicts more problems:
"You get graffiti," she says. "And then white collar crime."
Duty of care
Two doors down, another repossessed house has just been vacated.
 Auctioned houses are seen as bargains by investors
|
Whoever had lived there had clearly left in a hurry: the floors littered with unwanted documents, clothes and children's' toys; a door is hanging from one hinge in the kitchen.
There are cockroaches and mouse droppings and part of the ceiling has caved in through water damage.
A local politician in the Corona area has proposed laws requiring banks and other companies that repossess properties to be responsible for their upkeep.
The measure would give county authorities the power to levy fines on lenders that fail to maintain empty homes in keeping with the properties around them.
It has yet to be voted upon, although similar laws are in place in other parts of the country.
Lucrative auctions
Back at the auction, most of the buyers seem to be amateur investors, with a varying degree of sympathy for those whose homes they have just bought.
 Auction winners hope to profit from their bets
|
Some are critical of those who had overstretched themselves in the housing market, others more focussed on the opportunities for them to make money from repossessed housing stock.
All seem confident they could turn a profit, that auction prices perhaps reflect a truer value, and that the rental market will stay strong while the crisis continues.
Meanwhile some are making money right now.
With experts predicting the number of foreclosures could carry on rising for at least the next six months, the auction companies know that theirs, at least, is a growth industry.
Radio and newspaper ads are again touting “How You Can Make Money In The Foreclosure Market”. Even Donald Trump’s Trump University is promoting the same thing.
Maybe now people believe that the “bubble” has burst!
How much of this is “white flight” from a state bent on it’s own economic and social destruction?
Real Estate is the business of making a profit off of other people's misfortunes.
29% loss. Not sure if that is bottom yet.
Great leap, Einstein!
WTF?
Uh..the house should be valued at the price it was purchased at, not the inflated bubble price.
>>>There are bargains to be had. One man says he paid $375,000 for a house valued at $616,000.
Wait til the guy tried to resell it and most buyers cant put 10% down, which is now required in a lot of CA....sometimes 20%. It will fall even further.
In Corona? None.
BK, i hear you. I sold my townhome in So Cal back in May of 06. Praise God! We hit the peak of the market. I recently saw the same model listed for 70K less and sitting on the MLS for 60 days. YIKES! And that was in one of the most desirable areas in OC.
i have no idea what that means, but for some strange reason it’s funny. I got a flashback to watching a bad COPS episode (like there really was a GOOD episode) :o)
All over the country are lots full of unoccupied cars. These are called used car lots, dealer lots, and driveways. The same for boats. Go anywhere from Maine to Key West. There are more boats on land then in the water.
Is this a problem. No. Of course not. So why housing? Because the gooberment is in it, and distorting the housing industry. Does the government care about used car sales? About the the few number of days boats are used? No. And why should it.
Having excess housing is good. It keeps the costs low and gives shoppers a large, availble inventory of houses. No different then flat screen TVs, custom auto rims or any other product.
We also sold our house in april of 2006, and we got top dollar! It sold in 28 days! We moved to Arkansas and built our dream home on a lake.... Sure glad we did it when we did!
Ditto that but we are in TX now. Amazing how many CA couple are here and still coming. We built a new home in a new neighborhood and every 3rd or 4th house is someone from CA.
Required for now. Lots of stated-income people that low-ball income for tax purposes but it bites them in getting financing.
They can’t buy but they want to maintain whatever-status. So they rent.
In our area the typical lease on a house like we’re living in has risen from $2,500/mo to $2,750 in the last year. They’re not going like hotcakes, but still in demand and don’t sit on the market more than 3 months or so.
It’s funny to me that they couldn’t “afford” the $2,460-ish monthly mortgage payment, but can afford to scratch out a monthly check for $2,750, provide a “last month” cashier’s check for $2,750, and a $1,500 cashier’s check for security deposit, and a $1,000 cashier’s check for “small dog” deposit. Then they have to shell out $73 or $78 or whatever per month for HOA, then utilities, etc.
It’s one of those “they can but they can’t”-type situations. They have money coming from *somewhere* but can’t document it appropriately for whoever. I suspect that’ll change. Then you’ll see people change from leasing to selling again, IMO.
No he didn't.
He bought a house grossly overvalued at $616,000, and probably still overvalued at $375,000.
These people are part of the original problem. They dream eventually to see the original overvalued price and get rich.
In the meantime they get to support the parasites of society with ever-spiraling upward taxes: bureaucrats and the underpriviledged, with huge house values and corresponding tax rates.
Good luck to them!
There are a lot of Californians here also, we have several on the same street we live on...
Seems like we’re all making a run for it! We sure don’t miss California either, well I do miss the shopping there but that’s all!
I wonder if these people understand that a home, like anything else, is only worth what someone is willing to pay for it. In other words, that $615K house you got for $350K? It ain’t worth $650K.
sw
The phrase “catching a falling knife” comes to mind.
I think she meant you might get spaghetti on your collar.
Oh, I see. White collar grime. Clearly another unfortunate case of misquoting by a reporter.
I miss my family, but when i look at my mortgage, realize my wife stays home with our young child and we make it on one income and are about 3 year away from being debt free and we are in our mid 30’s I get over it. Plus a ticket home once a month will be peanuts after all debt is paid off. (still got some debt from a failed biz, my MBA and one car)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.