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Housing Falls Off the Cliff As Foreclosures Continue Unabated
FDL News Desk ^ | 09/16/2010 | David Dayen

Posted on 09/16/2010 7:57:56 AM PDT by SeekAndFind

The “extend and pretend” approach of the Treasury Department, through HAMP, has reached its end, and foreclosures are surging higher than ever.

Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure listing firm RealtyTrac Inc. said Thursday.

In all, banks repossessed 95,364 properties last month, up 3 percent from July and an increase of 25 percent from August 2009, RealtyTrac said.

August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May.

There are enough homes in delinquency that the properties entering the system slowing will have no material effect on foreclosures increasing. And that shows no signs of abating. What’s more, banks are basically forbearing the first couple months of delinquency, artificially lowering the number of homes entering foreclosure because they don’t want to initiate the process.

Less trial modifications are being taken up through HAMP, as word of mouth spreads that the program is less than helpful at best and a predatory lending scheme at worst. The banks remain reluctant to do affordable workouts, especially with second liens, because they’d rather pretend the profits from them are on the books. They’d rather get something for the homes by returning them to the market, even though sales are at their lowest in 15 years. This giant “shadow inventory” just becomes a loss leader month after month for the banks, as more people just decide not to pay and take the risk of playing foreclosure roulette.

(Excerpt) Read more at news.firedoglake.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: bhoeconomy; democratcongress; democrats; economy; fail; foreclosures; hopeychangey; housing; obama
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1 posted on 09/16/2010 7:57:59 AM PDT by SeekAndFind
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To: SeekAndFind

gonna be some good investments cheap if you got the money

This could be a perfect storm for real estate investors

buy cheap, when inflation hits the prices will go through the roof- when the economy recovers you will be stting on a goldmine

Anyone want to form an investment group with me?


2 posted on 09/16/2010 7:59:54 AM PDT by Mr. K (PALADINO FOR GOVERNOR OF NEW YORK)
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To: SeekAndFind

This is the worst economy since FDR.


3 posted on 09/16/2010 8:01:00 AM PDT by AU72
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To: SeekAndFind

TOP 5 STATES IN FORECLOSURES:

1. NEVADA (One in every 84 households)
2. FLORIDA (One in every 155 households)
3. ARIZONA (One in every 165 households)
4. CALIFORNIA (One in every 194 households)
5. IDAHO (One in every 220 households)

VERMONT HAS THE LOWEST FORECLOSURE RATE (ONE IN EVERY 18,500)


4 posted on 09/16/2010 8:01:58 AM PDT by SeekAndFind
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To: AU72

Obama is the new FDR. High unemployment for as far as the eye can see.


5 posted on 09/16/2010 8:03:35 AM PDT by Nonstatist
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To: SeekAndFind

AH! This explains a few things to me. I was in the market a couple of years ago for a house. Found one I absolutely loved, had been on the market for 15 months, was foreclosed and the original mortgage holder skipped down. They listed it at $150K, so I low-balled at $120K. They wouldn’t budge... even $5K. The rationale was that they wanted to make all of the money back.

Fast forward to today and these banks are sitting on foreclosed properties with the HOPE that they can sell them at a profit. Meanwhile folks like me are out looking for homes where the owners are still in control but trying to sell.


6 posted on 09/16/2010 8:04:38 AM PDT by rarestia (It's time to water the Tree of Liberty.)
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To: Mr. K

TOP 5 STATES IN FORECLOSURES:

1. NEVADA (One in every 84 households)
2. FLORIDA (One in every 155 households)
3. ARIZONA (One in every 165 households)
4. CALIFORNIA (One in every 194 households)
5. IDAHO (One in every 220 households)

VERMONT HAS THE LOWEST FORECLOSURE RATE (ONE IN EVERY 18,500)

ROUNDING OUT THE TOP 10

6. UTAH (One in every 230 households)
7. GEORGIA (1 in every 246 households)
8. MICHIGAN (One in every 255 households)
9. ILLINOIS (One in every 314 households)
10. HAWAII (One in every 315 households)


7 posted on 09/16/2010 8:04:45 AM PDT by SeekAndFind
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To: SeekAndFind
"VERMONT HAS THE LOWEST FORECLOSURE RATE (ONE IN EVERY 18,500)"

That's because it's populated by left-wing trust-funders.

8 posted on 09/16/2010 8:06:18 AM PDT by Reo
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To: rarestia

RE: They wouldn’t budge... even $5K. The rationale was that they wanted to make all of the money back.


Looks liek they are not that desperate enough to sell yet. Time is on your side if you have the cash, you’re not desperate to buy (or are you?)


9 posted on 09/16/2010 8:06:29 AM PDT by SeekAndFind
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To: Mr. K

If you can afford the taxes on the properties. Local tax revenues are down so they’ll start hitting harder on property taxes, like clockwork.


10 posted on 09/16/2010 8:06:59 AM PDT by Abathar (Proudly posting without reading the article carefully since 2004)
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To: rarestia

ahh but the banks will not approve the short sale and the seller can’t sell because the bank will not waive the deficiency.

They are forcing people into bankruptcy where the deficiency does not matter and second mortgages can be stripped off.


11 posted on 09/16/2010 8:07:08 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: Abathar

Another perfect storm- IF Paladino wins and cuts NY taxes... OMG this could be huge


12 posted on 09/16/2010 8:08:51 AM PDT by Mr. K (PALADINO FOR GOVERNOR OF NEW YORK)
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To: Abathar

Another perfect storm- IF Paladino wins and cuts NY taxes... OMG this could be huge


13 posted on 09/16/2010 8:08:54 AM PDT by Mr. K (PALADINO FOR GOVERNOR OF NEW YORK)
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To: rarestia

Homes, especially older ones, don’t do well sitting vacant for long periods of time. There’s an old farm house that was repo’d down the street and has been sitting empty for almost 2 years now. Without the heat or air on and no circulation it is just rotting from the inside out, depreciating faster and faster as time goes by.

They wait too long it will come back to bite them.


14 posted on 09/16/2010 8:11:50 AM PDT by Abathar (Proudly posting without reading the article carefully since 2004)
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To: Mr. K

a goldmine especially for non HOA and non condos.

the forclosures, which are growing so fast some florida judges are finding it easier to just ignore legal defenses as a means of preventing docket gridlock, are often caused by run away defaults in HOAs forcing remaining owners to pay for the non-paying.l


15 posted on 09/16/2010 8:12:48 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: SeekAndFind

I bought 3 years ago. This was all going on during the major shift in financial reforms. I bought at 5.5% fixed. I’m very happy.


16 posted on 09/16/2010 8:14:54 AM PDT by rarestia (It's time to water the Tree of Liberty.)
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To: Mr. K

I guess if you had the risk capital and could afford to hold for 10 to 20 years, there might be some money to be made.

I’ve made the point before that unless borrowers are able to finance, the housing market won’t find it’s bottom until buyers can afford to purchase with cash.


17 posted on 09/16/2010 8:15:20 AM PDT by Rational Thought
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To: longtermmemmory

My fiancee is in a similar situation. She was priced out of her home due to ridiculous property tax increases in the state, and when she tried to short sell, she wasn’t allowed. The guy was going to offer her $100K in cash for the house, but the bank wouldn’t take it.

I understand that the bank legally owns the home, but can’t the homeowner do something to pay off part of the note and get into a payment situation to pay off the balance? Why is that not an option?


18 posted on 09/16/2010 8:18:27 AM PDT by rarestia (It's time to water the Tree of Liberty.)
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To: Abathar

My current home was on the market for 10 months. It needed a LOT of TLC when I moved in. It took 4 runs of a professional grade steam cleaner to get the carpets to an acceptable color and cleanliness.

It’s unfortunate that these homes are sitting on the market for so long, but the banks are the big losers in the end.


19 posted on 09/16/2010 8:23:27 AM PDT by rarestia (It's time to water the Tree of Liberty.)
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To: rarestia

I just knew 5 years ago this was going to come back to bite us eventually.

They let every ditchdigger with a checking account buy a McMansion with no money down back then. A huge surge in new homes like that means a bad slowdown coming, but builders don’t worry about tomorrows work when there’s plenty of work today.


20 posted on 09/16/2010 8:30:04 AM PDT by Abathar (Proudly posting without reading the article carefully since 2004)
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To: rarestia

RE: I bought at 5.5% fixed. I’m very happy.


You realize of course that interest rates today are much less than that...


21 posted on 09/16/2010 8:30:26 AM PDT by SeekAndFind
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To: rarestia

Due to losing our jobs, a year ago, we called Chase right away and they told us not to pay and they would do a loan modification. They never got back to us but I kept calling them, and sent us a foreclosure notice. Then I called and they changed that and said we did not have to pay for three months, followed by a trial period making $50 payments for three months, followed by another three month trial of $150 per month payments, and finally three more payments of $350 per month which we paid.

Then, in August, they transferred our mortgage to a company called IBM out of California. We did the paperwork, etc. and we have never heard from them.

I finally wrote to them and said we were unable to make the September payment and still nothing.

Our balance is $155k but the house would probably only sell for about 98k.

I am sure they are really behind these days with regard to foreclosures and kicking people out. I have heard of a few people who have been in their homes over a year and the house has not been sold.


22 posted on 09/16/2010 8:30:53 AM PDT by hsmomx3
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To: Abathar

Perfect synopsis, Ab! I know too many families with no business owning a home, let alone a $450K home, who are now under water and fighting foreclosure.


23 posted on 09/16/2010 8:36:38 AM PDT by rarestia (It's time to water the Tree of Liberty.)
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To: SeekAndFind

Yes I do. I wasn’t bragging, just mentioning it.

My manager recently bought a home at 4.3%, but I’m not going through the rigamarole to refi when I’m happy with the current rate. If it was 3.0% or lower, I might consider it. 5.5% is much lower than what my mother and father paid on their home.


24 posted on 09/16/2010 8:38:39 AM PDT by rarestia (It's time to water the Tree of Liberty.)
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To: hsmomx3

From what I’ve heard, most of these banks aren’t returning calls. They’re so inundated with foreclosures that they can’t answer everyone’s phone call. Your best bet would be to go to a branch and speak to a mortgage manager. That’s worked for a couple of my friends.


25 posted on 09/16/2010 8:40:52 AM PDT by rarestia (It's time to water the Tree of Liberty.)
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To: Rational Thought

housing cost 2-2.5 times yearly income. case closed.


26 posted on 09/16/2010 8:42:10 AM PDT by OregonRancher (Some days, it's not even worth chewing through the restraints)
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To: Abathar
Without the heat or air on and no circulation it is just rotting from the inside out, depreciating faster and faster as time goes by.

The other problem we are having here in the Peoples Republic of Illinois is looting. People sneak into the empty houses and strip out the fixtures, AC, Furnace and even in some extreme cases the copper pipe and wire. This is going to end up like the dark ages where the robbed our ruins of Roman Villas dotted the countryside. We will have entire suburbs of ruins.
27 posted on 09/16/2010 8:42:50 AM PDT by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
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To: Mr. K

“Anyone want to form an investment group with me?”
////////////////////////////////////////////////////////////

I could maybe sell enough scrap metal to raise fifty dollars.


28 posted on 09/16/2010 8:54:30 AM PDT by RipSawyer (Trying to reason with a leftist is like trying to catch sunshine in a fish net at midnight.)
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To: Mr. K

“Anyone want to form an investment group with me?”
////////////////////////////////////////////////////////////

I could maybe sell enough scrap metal to raise fifty dollars.


29 posted on 09/16/2010 8:54:49 AM PDT by RipSawyer (Trying to reason with a leftist is like trying to catch sunshine in a fish net at midnight.)
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To: Nonstatist

“Obama is the new FDR. High unemployment for as far as the eye can see.”
////////////////////////////////////////////////////////////

Which means that IF the nation survives then fifty years from now “learned” pundits with ivy league doctorates will argue endlessly about who was the greatest of all presidents FDR or BHO. I am getting sick of that sort of insanity.


30 posted on 09/16/2010 8:57:47 AM PDT by RipSawyer (Trying to reason with a leftist is like trying to catch sunshine in a fish net at midnight.)
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To: rarestia

Chase already turned our loan over to this IBM company who works as a collection company and also a loan modification modification company.

We received the notice about that after the fact.


31 posted on 09/16/2010 8:59:51 AM PDT by hsmomx3
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To: hsmomx3

I apologize, I don’t have any experience in that business, but it sounds like you got flung around like an 8-year-old on a swing with a broken rope.

Are you at least stabilized now, or are you still fighting them over all of it?


32 posted on 09/16/2010 9:01:56 AM PDT by rarestia (It's time to water the Tree of Liberty.)
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To: GonzoGOP
Here in Arizona, no one is sneaking in to strip the houses. It's the foreclosed former homeowners doing it. The thought behind it is, "I've been paying for this place for 5 years. I've loved and taken care of this place. I've installed ceiling fans, shutters, tile, carpet, upgraded fixtures, appliances, landscaping, cabinets, epoxy in the garage, etc. etc. etc. I'm not walking away from that." So they remove whatever they can to either keep or sell. Can't blame them... especially the way everyone has been treated by banks which were given stimulus money to spend to pay down principle and instead bought bonds with it.

I live in a condo community and the prices have fallen through the floor. They cannot sell these places because they'll only consider you if you walk in with cash. I'm seeing a movement afoot amongst my neighbors now... people are buying the place three units over and walking away from their own. It's happening more and more often. But you do have to have 100% cash. So people are cashing out IRAs, one of my neighbors cashed in a life insurance policy. The prices are getting so low that it's becoming feasible.

33 posted on 09/16/2010 9:09:00 AM PDT by ponygirl
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To: rarestia

I have fought for over a year because they mishandled the entire thing. We are still unemployed and unemployment stopped a month ago.

I don’t have it in me to continue as my priority is to get a job and that is taking so much out of me. Geesh, when I finally do land a job, I will be mentally and physically exhausted. It really does mess you up emotionally. It used to be I could find a job within one week but not anymore.

We’ll just have to move into an apartment if that is what is meant to be but I need a job first that will pay rent and utilities.


34 posted on 09/16/2010 9:09:18 AM PDT by hsmomx3
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To: ponygirl

Oops, did I say life insurance policy? It was some kind of insurance policy....I don’t think you can cash in life insurance unless you kick the bucket. LOL!


35 posted on 09/16/2010 9:11:59 AM PDT by ponygirl
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To: hsmomx3

Took me almost 6 months to find a job last time I was out of work, and I identified that period of time as when I became an alcoholic. I know it is cliche, but I feel your pain.

Good luck on the job hunt. It is absolutely nasty out there, and I thank the Lord daily for being employed.


36 posted on 09/16/2010 9:14:51 AM PDT by rarestia (It's time to water the Tree of Liberty.)
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To: ponygirl
Here in Arizona, no one is sneaking in to strip the houses. It's the foreclosed former homeowners doing it

I'm sure there is a lot of that going on here too. In the case of the houses I was thinking of they had never been occupied. A developer had put up a dozen or so $1,000,000 plus houses and then went broke. They ranged from complete and ready for occupancy to just framed in shells. They couldn't sell the complete ones because nobody wanted to move into a million dollar home next to a half build shell with no possible completion date. Also if there was anything wrong with the house there was nobody to contact since the builder was gone. So they just sat empty and then it was discovered that most had been completely looted and scavenged. The paper said they would probably need to be taken down to the foundations since it was hard to tell how much damage had been done.
37 posted on 09/16/2010 9:17:26 AM PDT by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
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To: SeekAndFind

Times are so bad even bank robbers are giong out of business.


38 posted on 09/16/2010 9:20:20 AM PDT by Vaduz
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To: Abathar

I learned that as a child, there used to be a lot of old farm houses that sat high off the ground with no underpinning, with no subfloor, just a board floor, tin roof, no attic insulation, no wall insulation, clapboard wood siding and a “breezeway” hall down the center with doors opening to the outside on the ends. Those old houses would stand forever as long as someone lived in them to keep some heat going in the winter and open windows for ventilation in the summer, they needed very little maintenance but as soon as they were allowed to sit empty they fell apart very rapidly. Dust would infiltrate and accumulate, holding moisture that rotted the wood, squirrels would make nests in the houses and soon they fell.


39 posted on 09/16/2010 9:28:21 AM PDT by RipSawyer (Trying to reason with a leftist is like trying to catch sunshine in a fish net at midnight.)
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To: Rational Thought

“I’ve made the point before that unless borrowers are able to finance, the housing market won’t find it’s bottom until buyers can afford to purchase with cash.”
////////////////////////////////////////////////////////////

If we drop down to cash prices houses will be VERY cheap!


40 posted on 09/16/2010 9:30:41 AM PDT by RipSawyer (Trying to reason with a leftist is like trying to catch sunshine in a fish net at midnight.)
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To: OregonRancher

Means there will be an awful lot of $60,000 houses.

Also means, it won’t matter as our entire economic system will have collapsed, which seems to be the goal.


41 posted on 09/16/2010 9:34:46 AM PDT by Rational Thought
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To: rarestia

It is hell, esp. here in Arizona!!!


42 posted on 09/16/2010 9:36:31 AM PDT by hsmomx3
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To: SeekAndFind
Interesting. I think Vermont has the lowest foreclosure rate because it never really got caught up in the real estate boom in the first place. It's a small state that's mostly rural, and I'll bet that on a per-capita basis there are more people living there in homes with no mortgages than almost any other state.

Pennsylvania is another state that probably has a low foreclosure rate. Very old and static in a lot of ways, which made it seem like a dinosaur a decade ago but provides a degree of comfort these days.

43 posted on 09/16/2010 9:37:21 AM PDT by Alberta's Child ("Let the Eastern bastards freeze in the dark.")
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To: SeekAndFind
For what it's worth -- please check my comment:

http://www.freerepublic.com/focus/news/2589698/posts?page=20#20

44 posted on 09/16/2010 9:41:21 AM PDT by ex-Texan (Ecclesiastes 5:10 - 20)
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To: GonzoGOP

I see what you mean. I’ve heard of that happening in the Inland Empire area of California, too. Entire tracts of McMansions and Garage Mahals just standing vacant in the desert. Such strange times.


45 posted on 09/16/2010 10:14:57 AM PDT by ponygirl
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To: Rational Thought

Heh. Finally. I have been waiting for housing sanity for a long time. I knew prices were unsustainable simply because not enough of us young’uns could afford one. When that happens, the market inevitably falls out.

Then we’ll see prices the equivalent of what our parents and grandparents paid for theres, and guess what? They will be so upset that instead of making money on their homes, they will be lucky to get back what they paid for it.


46 posted on 09/16/2010 10:41:27 AM PDT by BenKenobi ("Henceforth I will call nothing else fair unless it be her gift to me")
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To: BenKenobi
I did a search on property values about 6 months ago. As of then, I did find locations in California where prices were back to levels of the late 80’s.
47 posted on 09/16/2010 10:49:04 AM PDT by Rational Thought
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To: ponygirl
Entire tracts of McMansions and Garage Mahals just standing vacant in the desert.

When I was a kid there was an area we used to play in that was all subdivided, but had no houses. Streets, sidewalks, fire plugs but no buildings, just prairie grass. It was a subdivision that had been started before the depression and then abandoned when the crash hit. This was 50 years later and it was still sitting there half developed. Time had just past it by. It is part of a forest preserve now. Turns out the prairie grass won, erasing the signs of human folly in 80 years.

I wonder how many of these ruins will still be around 40 years from now when we are the ones telling out grand kids about the times before the "Big Crash".
48 posted on 09/16/2010 11:07:39 AM PDT by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
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To: Rational Thought

I’ve in California for 11 years, near Studio City. And with the oversupply of housing you would think there would be no construction but within one block of me are three sites underway, 2 48-condo projects and one 200-condo project all within one hundred yards of each other. I have no idea who is going to buy these. Crazy.


49 posted on 09/16/2010 11:12:12 AM PDT by DHerion
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To: hsmomx3

Where do you live ?


50 posted on 09/16/2010 12:35:29 PM PDT by ComeCulturedGirl (I win !)
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