State of the State: California Budget and Housing Situation. Backroom Deals, Screaming for Paulson, and Understanding Revenues.
If you happen to stumble upon the Governor’s website, you will see a ticker showing the number of days that the legislature has failed to act. We are now approaching day 100 and there is another number just below the day showing how much money has been squandered by this boondoggle. So what is the solution to the massive California budget deficit? Secret closed door meetings! This is their idea of “democracy” in action. See, our dysfunctional state government needs a basic lesson in negotiations and compromise. First, even I realize that I won’t get everything I want in life. Heck, I think most of you who interact with the world and people understand that. Yet our state politicians operate in a parallel universe where everyone gets what they want and money never runs out.
“(LA Times) Reporting from Sacramento — Under the gilded dome of the state Capitol, the Cone of Silence has descended. A veil has been drawn. Secrecy has prevailed as the wizards have labored behind the green curtain to find a way out of California’s $42-billion budget hole.
Gov. Arnold Schwarzenegger and the top four legislative leaders have again been meeting behind closed doors as California teeters at the brink of fiscal insolvency. Rank-and-file lawmakers, special interest groups and the public have been shut out of the bargaining process. There have been no public hearings, no chance for input — and that has some folks riled.”
Now the rubber is meeting the dreaded road. So the solution has now shifted to backroom negotiations since that is the only way things will move. One side is adamant about no tax hikes yet doesn’t have the guts to publicly bring the axe to tens of thousands in a state with unemployment already nearing double-digits. They just keep uttering this tired old mantra with no real solutions. The other side is not helping either. They want to keep running up massive deficits and fail to realize that our current economy is now in a different world. They want to maintain the same spending yet fail to realize that the sources of revenue have dried up. It would appear no one wants to make the hard decisions and that is why our state has now resorted to backroom dealing. Bottom line, our budget deficit is so bad that we can all expect tax hikes and spending cuts. We knew this years ago but everyone wanted to believe in the housing bubble fairy and based their future expectations on this obviously flawed model.
If you had asked people back in early 2008 if they envisioned people moon walking away from their mortgages in mass, they would have said that you were out of your mind. Yet they are. If you had asked people back in late 2007 if California housing could fall 50 percent in one year, they would have thought you mad. 50 percent is already here. With all that is going on, we’ve almost forgotten about the source of this dismay, the housing market. Let us take a look at some data:
Even with the above data sources, we are looking at 48 to 52 percent drops from the peak back in 2007. It is interesting that both data sources had wildly different peaks (a difference of $113,640 while the current median price is only off by $32,100. It would seem that we are converging to a single data point. The crashing housing market has affected the California economy profoundly because our state arguably had the biggest bubble of them all. A $600,000 median home price for a state with a median household income of $60,000? There was no happy ending to this story.
Let us do a quick check on the overall California housing market. For the latest month of home sales we see that 37,836 homes sold in the state.
Monthly Sales: Â Â Â Â Â Â Â Â Â Â Â 37,836
Percent previously foreclosed:Â Â Â Â Â Â Â Â Â Â Â 57.5%
December 2008 Data
Notice of Defaults:Â Â Â Â 42,290
NTS:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 27,598
REO:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 19,561
Total:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 89,449
Bottom line is more and more troubled assets are hitting the market at the most inopportune time. Keep in mind we are only at the beginning of the massive pay option ARM fiasco that will hit in full force in 2009. So prices will be coming down further and are still in line with my bottom call of summer of 2011. This wasn’t some random made up number, I picked this date because this is the time we should be washing out the last wave of the option ARMs from the market.
What many pundits fail to factor in is the shift in psychological calculus hitting the state. I don’t go around preaching doom and gloom all day and that is why I use this blog as a spot to discuss these issues. Yet I can’t tell you how many people now come up to me and ask me, “what is going on with the economy?” or “I just don’t see how we will get out of this.” This was unheard of even last year. In fact, I think I am now the optimist. Look, things will get bad but we will come out of this. Yet many of these people are still fixated on the notion of those sky-high bubble home prices that we saw in 2007. Those are not coming back. The quicker people can accept this fact the faster they will be able to appreciate the new reality.
I was watching a camera in a trading pit when current U.S. Treasury Sectary Timothy Geithner announced the new terms for the failed TARP and other ideas of how the market was going to deal with the situation. As you know, the market tanked and while red was all over the floor you could hear someone in the background scream out, “bring back Paulson!” Of course, these people have little appreciation of the 3.6 million people that have lost their jobs and here we are now deciding how we can avoid a Japan scenario or a Great Depression. A year ago, it was insanity to even utter the Great Depression while now it is brought up everyday. A few months ago, we heard very little about the lost decade in Japan, now we hear our current President talking about it. Things are changing very quickly at the moment.
Let me say something about what occurred with the market falling. This coupled with the floor trader yelling to his god, exemplified the crony capitalistic system that is currently failing on an epic scale. The market didn’t react in a positive move because what they wanted to hear was this:
“Yes, the U.S. taxpayer will be buying every toxic asset from corrupt Wall Street and its puppet lenders and not even ask how or why they got into the mess. We will put more trillions at risk so you can go on and find another bubble to fleece the American people.”
Remember CNBC had wet dreams about the bad bank that was a stunningly preposterous notion. Now, we get a semi private and public option of buying these toxic assets. The market didn’t like that. They didn’t like the “stress test” option either. In a way, it is stunning how deep the system has been infiltrated by a self-destructive financial delusion that is quickly fizzling out.  The spectacle of the CEOs on Wednesday should show you how out of touch these people are. They live in a reality completely disconnected from what is currently going on. They think the troubles of Americans started only a short while ago yet we all know that these troubles have decades of history (at least to prudent Americans). The debt culture is running on a 30-year sprint and is now collapsing.
Another stunningly stupid notion going around is this idea for a stop to “mark to market” action. In a few words, this group is arguing that you shouldn’t force institutions to put a value on an asset that would have to be sold in a brutal market and be taken at most likely, a fire sale price. What they really are asking of you is for you to bite into a dirt sandwich and pretend it is the greatest thing you have ever eaten. Trust us, that dirt will become ham and cheese in a few years. How interesting that during the boom they had no urgency to stop mark to market when assets were inflated to bubble prices. Another crony capitalistic mentality.
So going back to California, the once almighty Westside is now having a taste of the economic tornado:
“(LA Times) The Southern California real estate crash has finally reached the high-end areas of the Westside.
Home prices in Beverly Hills, Santa Monica and Malibu – which continued to soar well into 2008 – finally tanked at the end of the year, losing between 26% and 30% of their value in just a few months, the latest data show.
The sudden drop came as a surprise to Shelley Conn, who remained a believer in the myth that the wealthier parts of the Westside were immune until she put her Santa Monica house on the market last spring.”
I cannot tell you how many times, even when I highlighted homes in Santa Monica and Malibu that people were reluctant to believe that the Westside would ever see major price cuts. It was as if there was first, one large delusion bubble for the state of California and then hyper-bubbles in these select areas that kept these people believing the good times still were rolling. The housing crash is now uniform in destruction.
Many of you may be wondering how could it be that we missed such a big problem coming our way? Well first, you have to understand how California gets its money:
Let us spend a few minutes on this chart. California draws money largely from 2 sources, the personal income tax and the sales tax. In fact, approximately 80 percent of the state revenues come from these 2 sources. Take a wild guess how off we were? Well for the personal income tax, we were off almost $10 billion! The error is the size of the budget of many states in the country. Then you’ll see the sales tax which hasn’t adjusted much which of course makes no sense. They are heading into another problem. Well at least we have the liquor tax which is going to double in the next fiscal year? Excellent, we’ll drink our way out of this budget deficit. Look at the estimates of 2009-10. They go up! Really? Who is going to be spending tons of money in 2009-10? I saw a recent survey that had nearly 1 in 2 people who are currently working worried about their employment. This is why we are in this mess. Imagine if you and your family made a budget with $200,000 in expenses yet only brought in $120,000. Do you see potential problems? A solution isn’t getting a credit card and a HELOC and sucking out $80,000.
We are going to have a tough few years. It is important to get a grasp of what is going on so you are better prepared to debate the merits of what is going on. I find it troubling that many people make up their mind before hearing a debate because of the label of “Democrat” or “Republican” or “Independent” which is insane. It is time we are equipped with the data and do what is best for our country no matter who brings the solution to the table. The crony capitalist have had their share and it is time we stop handing them blank checks. That is, unless you enjoy backroom deals.
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27 Responses to “State of the State: California Budget and Housing Situation. Backroom Deals, Screaming for Paulson, and Understanding Revenues.”
Doc, you run a great site, but sometimes I think you need a vacation. Your last paragraph is touchingly naive, which is something you are not. Of course, even I, a terrible cynic, have bouts of optimism and idealism. The powers that be and the crony capitalists will do whatever it takes to keep them in power and flush with wealth. One day, the system will crack and we will have some sort of revolution. Change won’t happen from Congress and Wall Street becoming patriotic or honest, nor will the average American magically accept his own responsability for this disaster.
Between Frost’s choice of fire or ice, I think we are heading for fire. Frankly, burning most of it down and starting all over is probably a good idea.
Visting your state 3-4 times a year I’ve never understood the people who own multi-million dollar mcmansions pay 1/3 in property taxes for what I pay for a small 1600 sq. ft. house north of your state. I understand Prop 13 was in place, but if Schwarzenegger raised property taxes even slightly, it would fill the coffers of the state’s budget. Your property taxes compared to the rest of the country are way too low for what is owned in real estate in California. Yes, I know all about your foreclosures and I’m talking about having raised them years before and you wouldn’t now be in this mess.
Thank you for another enlightening post Doctor and thank you for your A political statements. Like it or not, we are all in this thing together and blaming one political party or another doesn’t help. Your comment about a 30-year debt culture is correct. I feel it is capitalism itself that is on trial.
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You didn’t mention the highest percentage change on your revenue table; oil severance tax. When I was working for a small independent oil producer in Wilmington a couple years ago, there were noises about an increase in state severance tax. Did they go up? I think with the current oil price ($36.00 a barrel at today’s close), that just might drive a stake into the heart of the California oil business. Most are old fields cutting >95 to 98% water anyway, and with the tough environmental standards CA has in place, it is quite a hostile operating environment.
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Keep up the good work.
DHB – With respect, it is long overdue you discussed with readers the structural differences of the housing markets of Texas and California. The international research evidence is clear on these issues, in that the core problems are starving land supply, creating the conditions for these bubbles to get underway.
The reality is that California bubbled out to in excess of 9 times annual household earnings while Texasand most mid Noth American markets (including Canadian) stayed at around 2.5 times household earnings.
Hugh Pavletich
Co author – Annual Demographia International Housing Affordability Survey
http://www.demographia.com
Performance Urban Planning
http://www.PerformanceUrbanPlanning.org
Christchurch
New Zealand
I think that we should deal with Wall St. scum the way that China deals with their fraudsters; DEATH.
The bankers are guilty of treason. They have ruined the lives of many and have caused misery throughout the world.
The bubble cost me a great relationship.
I have nothing but seething hatred for anyone in the FIRE industries.
I have lost all faith in the government and I doubt that anything will ever change my mind.
How can those bastards sleep at night?
“someone in the background scream out, “bring back Paulson!â€â€¦.. The market didn’t react in a positive move because what they wanted to hear was this: Yes, the U.S. taxpayer will be buying every toxic asset from corrupt Wall Street and its puppet lenders and not even ask how or why they got into the mess. We will put more trillions at risk so you can go on and find another bubble to fleece the American people.â€
>>>>>>>
All this is S-O-O-O beautifully satirized by John Bird and John Fortune (British, 60ish, political satire comedy duo)
>>>>>
Such wonderful lines as the idea that taxpayer money over to the banks isn’t rewarding failure, it is rewarding the “ingenuity of the markets” ; that the CDOs and SIVs are now WBA (worth bugger all); “There is an absolute rule in the City that houses do not always keep going up and only an idiot would believe that house price always went up but just this once we though house prices would always go up”; on ratings agencies that “triple AAA means almost 0 probability of loss and the word ‘almost’ came to haunt us”; Fortune (playing the interviewer): “So the situation is that if you make profits you keep them and if you have losses, we pay them. Bird (playing the investment banker) “sounds good to me.” and that everything would have been just fine until some idiot as ask a question (about CDOs) which should never be ask — how much are these things worth.”
>>>>>
Think these are in the order performed. The last 3 are 1 skit posted in 3 segments,
>>>>
http://www.youtube.com/watch?v=hXBcmqwTV9s
>>>
http://www.youtube.com/watch?v=hNYxTpEVQWc
>>>>>
http://www.youtube.com/watch?v=mzJmTCYmo9g
>>>>
http://www.youtube.com/watch?v=y3G_gViM9OU&feature=related (part 1 of 3)
>>>>>
http://www.youtube.com/watch?v=uSOeZliaCgU&feature=related (part 2 of 3)
>>>>>
http://www.youtube.com/watch?v=mHGbsOThuyM&feature=related (part 3 of 3)
>>>>
______
RE: “What they really are asking of you is for you to bite into a dirt sandwich and pretend it is the greatest thing you have ever eaten.”
>>>>
I think the word really isn’t dirt but starts with “s” and only has 4 letters also including t, h and I
Has there ever been a bigger jack-off than Schwarzenegger?
> If you had asked people back in early 2008 if they envisioned people moon walking away from their mortgages in mass, they would have said that you were out of your mind.
Bullshit.
Anyone with half a brain should have been able to understand that the phrases “adjustable rate mortgage” and “lowest interest rate in history” shouldn’t be in the same sentence.
Seriously, since at least 2006 my friends and I have not only expected this to happen but had been counting on it. It doesn’t take a rocket scientist to figure out that interest rates are not going to stay low forever. As for the housing price crash, well of course that’s going to happen next.
I’m surprised by the severity of this mess, but the fact it would happen at all has been painfully obvious for years.
two word review – shit sandwich
Just read a proposal where the government is mulling an idea to buy back people’s mortgages at the current value. In essence this is a massive principal reduction. How fair is this??? Extremely unfair IMHO.
So, we’re rewarding the gamblers who didn’t get out of the game in time. What does it do to those waiting for house prices to fall more???
This is NOT a failure of capitalism! Socialized losses are NOT a part of capitalism.
The banks richly DESERVE to fail. They have no right to take our money. The Wall St. coup, the actual takeover of our government by Wall St. is now complete. If Obama had any balls he’d nationalize the banks and put those bastards in jail.
“Change?” I think not…
A couple of comments to a fine post:
– the showdown between Ds and Rs in the state capital as characterized by the LA TImes isn’t quite accurate. The Ds have compromised on many of their pet causes in this negotation, but the Rs continue to insist on not raising taxes. In fact, the Republican leadership has gotten a vow from each R legislator to hold the line on taxes, otherwise they’ll be targetted come next election. If you think about it, this intransigence parallels what happened in the US House of Representatives regarding Obama’s stimulus (whatever you think of the stimulus bill) – Ds compromising on many points to placate the Rs, but Rs finally voting en masse against it.
– a commenter upstream mentioned how Prop 13 exacerbates our state’s woes. Even Warren Buffet – who I think owns a house in Laguna (or did, when I read this remark a couple years ago) – said that our property taxes are too low. This is a serious hindrance, as is the 2/3 majority requirement to get any taxe increase passed – which effectively allows a minority to hold the rest of the state hostage. This is simply wrong, majority should rule.
The bottom in 2011? I’ll put that on my calendar. I think it’s probably the best call to make given what we know now.
Another great post, DHB. Sadly, though, the crony capitalism continues. It was announced today that among the items cut out of the new stimulus package, which is likely to be approved by both houses of Congress, was a clause requiring banks and financial institutions to repay to the government any amount over $100,000 paid in bonuses to their employees, if the institution had accepted any TARP funds. Wall Street apparently was not happy with this arrangement, and they complained about it…and the jackasses on the Hill capitulated, as they always do when money talks. If Obama has half a brain, he’ll tell Congress that he won’t sign any bill that does not include this language. And if any other language that holds the criminals and rat bastards of Wall Street was excised, he should force Congress to put that back in, as well, before he signs anything. I know it’s a pipedream, but just once I would love to see a President let Congress know that there are certain areas in which he will not cave in to monetary pressure, even if they are more than willing to kiss the banksters asses.
“A Descent into the Maelström”
A friend just told me he went by Starbucks the other day to get something his son wanted and the line was so long he didn’t stop. The Kudlow-Krazies still think this will all pass with no pain and some salient government action. The repos are being bought at every auction for still too high a price. The overpriced universities are still full of students taking on un-repayable loans. People have learned how to spend beyond their means and refuse to change their lifestyle habits. It’s insane, but that’s how it is.
Yeah, I heard Kudlow railing on mark-to-market, like that is the problem, and the liars he brings on justifying that absurd statement. My dog poops Moody’s AAA and my model says they’re worth a million a turd. Does it matter that nobody wants them? Of course it does!
Just watched CNBC “House of Cards”, which was like reading this blog two years after the fact. More people are realizing things are bad. Doc, I want to be an optimist too, but this time it really is different:
I used the EA Poe title with ‘Maelstrom’ because this is a self-perpetuating descending vortex. Each round of layoffs leads to more foreclosures leads to more financial destruction. We already have two wars going, so starting a third might not be a good idea (although BHO wants to ramp up the Afghanastan maelstrom/quagmire). The severity of this downturn is exposing the facades of other frauds. Every major city in the country is on the hook for expensive sports stadiums and arenas, with steroid-infused, mulit-million dollar morons we spend all our time rooting for. How many states will need a bailout?
Worst of all, our whole economic system is a facade, and if the downturn exposes the dollar as a vapor currency, the ramifications are unimaginable; so the rest of the world pretends that if they can just keep the music going a little longer they can find a chair.
Greenspan confessed a few things in the show that surprised me. He finally acknowledged that everyone knew what was going on and that they thought they could get out before theater collapsed, but there were too many players and it’s all going up in flames.
I try to be optimistic because everyone hates a messenger bearing bad news, but I want to hear how this will get better, rather than “just trust me it will get better”. Even if it does appear to be getting better, as in 1934 when Morgan intervened, it may just be kicking the can down the road a few years and it crashes even worse (1937). I pray I’m wrong and this thing will somehow work out, but I don’t see any end to this. Even if the bleeding is stopped, where do we go from here? We can’t resume that failed plan. Our industry is a shell of it’s former self. We still have entitlement programs coming due, and interest on all the money we borrowed to stop the bleeding. We still have two years of Option Arm Resets en-masse. We still have a declining intelligence, a generation of the worst work-ethic, assumed.
Here’s another problem I don’t think anyone discussed: Layoffs of people just a little older than me will lead to people cashing in the remnants of their 401k’s. That a double net outflow to the stock market: No longer contributing and cashing out. Also, they will start drawings down SS sooner–same effect.
New Reality–some get it, and like Muley in the Grapes of Wrath, many just can’t accept the change. Yeah, life goes on–but it doesn’t have to be this way. “Wherever there’s some NINJA mortgage being originated, I’ll be there. Wherever those mortgages are securitized and sold around the world, I’ll be there. Wherever the SEC and ratings agencies commit fraud cuz they’re in bed with the banks, I’ll be there”
Tom Joad III…
60-80% off in Sales Volume for January (YOY) on the Westside, ought to make people think twice about their neighborhood.
http://www.westsideremeltdown.blogspot.com
http://www.santamonicameltdownthe90402.blogspot.com
This country is practicing Casino Capitalism and Socialized losses…..
Please, just give me socialized medicine!!!
Bullshit.
Right now is the lowest interest rate in history. Fed rate: 0-0.25%, GB bank of england, the lowest in its 300+ years. If you thought 1% was low, you seen nothing yet, my young padawan.
The government will push rate to 3% and print massive amount of money. Buy a house before inflation hits and you get priced out forever. You know, government can not print land anymore.
Huh Latesummer:
A co-worker just came into my cube this morning saying Orange country sales are up 40 percent this january from last. Claims to have sold her home in a week and now needs to move out and buy a new bigger better home in San Clemente.
I don’t understand home buying having never bought one myself. If someone offers to buy your home after one week, is that it, done deal, no more hassles?
So, what is the next bubble and how can I get in on it..?
but I’m sad to say that the next bubble will probably be in homelessness, and a bubble in crime… and huge bubble of suicides. And a bubble of divorces and angry financial settlements.
So my advice, for future investments..? Private Prisons, baby… That’s the next bubble that will makes us all wealthy..
“You know, government can not print land anymore.”
No, but they can make conditions on any given piece of land not worth the hassle anymore. At least half of the conditions of a value of land depend on government and industry.
@Anonymous
Not BS. What’s it going to take to get through your thick skulls? There is a big problem right now. The Fed wouldn’t go to zero unless they were at the very edge of the abyss, and they are. GB lowest in 300 years. That’s a good thing?? That means this is the worst situation in GB since Shakespeare and you think that’s a good thing?
The government is pushing on a string. Gonna bring back subprime? Every institution that has been bailed out is still failing–who can qualify for a McMansion any more. Once the folks that got out before the collapse spend their booty, who’s going to buy all these houses?
Print more land? Have you ever been on a plane? On a highway? There is so much land out there they won’t ever run out in this century. And so much once developed gone fallow. They could tear down half of every urban area in the country and just start over. I understand you are probably underwater and don’t want the truth out there, but even with a sucker born every minute, there are too many houses and not enough suckers, at least since there are now standards.
Sorry, your assumptions have been dogma for decades, and now they are just dog crap.
Wow. I didn’t think I’d ever hear anyone use the phrase “priced out forever” again except speaking derisively about real estate agents. Perhaps this person is just flame-baiting?
By the way how much is LAND in Detroit worth, there is your answer. They aren’t making any more!!
There is another dynamic to all of this is that wages paid to men between 1967 and 2006 (in 2006 dollars) rose only marginally from about $29,500 to $34,500/yr – about 15%. Women did better on a percentage basis form $13,000 to $26,000/yr – a near double. Workers have simply not made enough wages and have lived beyond their means for a long time. Savings rates also began to decline in the early 1980’s and went negative several years ago. It is no wonder people used their homes as ATMs. Unemployment and underemployment are one thing. It is another thing altogether when one is fully employed and still barely survives. So much for “Free Trade Agreements,” outsourcing, off shoring and so on. These programs have failed to serve the American people, but have served crony capitalists.
Wow, I haven’t heard someone say “priced out forever” seriously in quite a long time.
I guess it just goes to show, whenever you think there might be a bottom to Realtor dishonesty, nope, you haven’t gotten there yet!
Re: 2/12–my comment appears to have gotten munched or lost…I wanted to tell Expat that we financial/real estate heretics all need a vacation. South of France sounds good. ;D
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I wanted to add this link from the Sunday NYT on the new Senate minority whip, Eric Cantor, which is also a portrait of party politics uber alles at a time of national emergency:
http://www.nytimes.com/2009/02/15/us/politics/15cantor.html
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I’m with DHB on this. One of the big poisons of our situation is that the two-party system is spending as much or more energy worrying about holding power, than sharing it, or doing their jobs.
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“They’re not printing more land,” is, pardon me, an incredibly infantile concept. “Land,” like houses, jets, and crap on the Home Shopping Network, is a concept. It has only the value it is assigned and commands in the market. And that value is assigned on generally idiotic terms.
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Come back to me in 20 years, Anonymous, and tell me how much all that parched desert in California is worth, or the submerged parts of Florida, or the far-flung suburb-hinterlands of Arizona. The whole frikkin point of what’s happening today is that people have, for example, ceased to believe that filling a McMansion with consumer crap is the highest possible calling in life. Jinglemail, jinglemail, moonwalking away.
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The late 20th century models of economic boom were based on deferring costs, and the assumption that fossil energy and water would always come cheap for home and office developers, backed up with zillions of dollars of socialized spending, It was always a stupid model. And just because someone can come up with a new bubble to play Monopoly with doesn’t mean any of it has real value.
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There is, by the way, another bubble waiting to burst. It’s the fossil-energy-derived population one.
~
rose
Can someone please explain to me what these deluded idiots in Sherman Oaks and Studio City are doing?
Here is a house in Studio City that was purchased for $530K in 2000 (which was already to high in my opinion) and now they have the audacity to list it for :
$1,269,000
4215 Lemp Ave
Studio City, CA 91604
Beds: 3 On Redfin: 38 days
Baths: 2 Year Built: 1950
Sq.Ft.: 2,030 Lot Size: 10,301 sf
$/Sq.Ft.: $625 MLS#: F1794791
Status: Active
Last Sale: $530,000 (09/08/2000)
Do they not know we are in an economic crisis in the United States and that it all stems from the ridiculous housing boom?
There are many more even worse than this. People who bought in 2008 are now listing their homes for higher prices than they paid last year. Are they out of their minds? Are the realtors that are working with them also loosing it? The prices in these two areas are coming down much slower than anywhere else. This is why the comps are so high in this area. Are they manipulating the comps? Isn’t that illegal? Help me to understand …please. Who is still buying at these heavily inflated prices ? Talk about con artists…that’s all these realtors are, if they can convince people to buy at these prices.
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