"Bako will continue to see the growth, the jobs and the BOOM that everyone has spoken of. THIS hiccup is is nothing"

1st anon (aka Jason) you must be getting hungry with transactions dropping like a rock. Meanwhile my assets keep growing. BAHAHAHAHA.

Good luck getting a spot at the homeless shelter tonight.

"Why are there still MAJOR land investors sniffing around the market? Must be something here..."

LMFAO!!! They are giving up deposits faster than you are having your "investments" foreclosed on. BAHAHAHAHHA!

Bottom line:

• transaction are down 74% from the peak (lots of hungry commission people out there)
• Inventory is now at 17.6 months supply
• prices are down 7.7% YOY and down 13% from the peak
• NOD's are averaging 100-150 per week
• 74 lenders have gone bust and the survivors have tightened credit significantly

All of these items sound like the Bakersfield market is strong to me, If you just close your eyes and believe the lies! You and your soon to be travel agent profession lose credibility when you are always on the hustle to make a commission.

A couple of houses I had looked at for 225K are now being listed for 189K.  That's a significant drop in my book.  Also, in my old neighborhood (Park Stockdale) where equivalent houses sold for 300K +, my ex landlord has my old house listed for 269K and it will never sell for that because of needing a lot of upgrades.  Not to mention the market drop. 

Check out zillow.com for an interesting look at estimated home values.

Anny, wouldn't that be "!MOOB"?

It ain't over yet. It's just reaching cruise speed.................................

I predict that it'll bottom out just slightly above its original starting point. This is better than some places that are also taking an Industry move-out hit at the same time. Their markets will actually go below their original starting points.

"It ain't over yet. It's just reaching cruise speed................................."

Agree!

Some housing bubble news from Wall Street and Washington. “A high-ranking Treasury Department official on Wednesday chastised mortgage lenders for too-often failing to verify the income of borrowers with blemished credit histories, blaming the practice for rising defaults and foreclosures.”

“‘Sound underwriting and, for that matter, simple common sense suggests that a mortgage lender would almost always want to verify the income of a riskier subprime borrower,’ Comptroller of the Currency John C. Dugan said in a speech.”

“‘But the norm appears to be just the opposite,’ said Dugan, whose agency regulates nationally chartered banks. ‘Nearly 50 percent of all subprime loans last year accepted stated income,’ meaning the underwriters did not verify the information provided by borrowers on loan applications.’”

“The head of the mortgage banking industry’s trade group claimed mortgage brokers and lenders focused only on short-term profits benefited from the housing boom, but didn’t do enough to examine whether borrowers could repay.”

From Reuters. “Dugan cited a Mortgage Asset Research Institute study that found 90 percent of borrowers reported incomes higher than those found on file with the Internal Revenue Service and almost 60 percent of the stated incomes were exaggerated by more than 50 percent.”

“Another survey of more than 2,100 mortgage brokers, reported by Inside Mortgage Finance, found that 43 percent of mortgage brokers who use low-documentation loan products know their borrowers cannot qualify under standard debt-to-income ratios.”

“‘Let’s not sugar-coat what’s going on here,’ said Dugan. ‘The practice of inflating income is at best misleading, and at worst, fraudulent.’”

The Associated Press. “The heads of trade groups representing mortgage bankers and brokers traded barbs Tuesday over who’s to blame for the housing market’s woes.”

“John Robbins, chairman of the Mortgage Bankers Association, says he is ‘mad as hell’ at ‘a few unethical actors’ that have sullied his profession’s reputation.”

“‘Who made this mess?’ Robbins asked. ‘The short-term folks. People who get a commission when the deal happens. For them, it’s the number of loans that counts. Good loan? Bad loan? Who cares? For them it’s all about their commission,’ he added.”

“In reaction, the president of the National Association of Mortgage Brokers, e-mailed a statement that said: ‘It is truly unfortunate (Robbins) has attempted to shift blame away from Wall street, federally chartered banks, state-chartered lenders and underwriters for the subprime situation we find ourselves in today.’”

“Harry Dinham, president of the brokers’ group, added that congressional hearings have shown that ‘most residential mortgage loans are quickly sold into the secondary market — in fact most lenders are really just brokering the transaction but afraid or ashamed to admit it,’ he added.”

The Palm Beach Post. “Robbins made his comments in a speech at the National Press Club, where he called for tougher licensing standards.”

“‘Frankly, it’s too easy to hang a shingle and call yourself an expert in mortgages,’ said Robbins, whose trade group represents the real estate finance industry. ‘We need licensing of brokers, with a threshold that will weed out those unwilling to be responsible.’”

“Robbins said Congress should not rush to legislate when the market already is fixing itself, driving out those who took too many risks. For example, New Century Financial Corp. and more than 30 other subprime lenders have gone bankrupt this year.”

“‘Many of those who most abused the system are already out of business,’ he said.”

The LA Times. Robbins warned against excessive regulation in response to the sub-prime mortgage crisis, saying an overreaction could prevent millions of Americans from buying homes. ‘We don’t want to revert to a time when, without perfect credit, you couldn’t buy a home,’ said Robbins. ‘Yet regulatory or legislative overreaction could prompt a return to just that — to raise the bar.’”

“‘We appreciate the industry’s stated intentions, but they guarantee nothing,’ said John Taylor, CEO of the National Community Reinvestment Coalition. ‘We must reject any superficial, tinkering-around-the-edges approach from an industry that has yet to take responsibility for a foreclosure crisis, which they have described as simply a ‘market correction.’”

From CNN Money. “The subprime mortgage meltdown has been a shock to industry insiders, but now they say it’s hitting harder and faster than expected, even to those who predicted the crisis in the first place.”

“Michael Marriott, managing director for Credit Suisse, said, ‘Last October, I predicted the subprime market would collapse and many issuers would go out of business. But the violence and speed of the market sell-off surprised people.’”

“David Lowman, CEO of JPMorgan Chase & Co.’s global mortgage business, said, ‘35 percent of what once could be done, can no longer be done,’ referring to mortgage loan products that have effectively been taken off the shelves.”

“Duane LeGate, president of House Buyer Network, a specialist in short sales and foreclosure prevention, said one of the real estate agents he works with had six deals blow up within four days because, ‘The loan originator told him, ‘We’re not offering [these products] anymore.’”

“According to LeGate, this kind of thing just started to happen in the past month or so.”

“‘Anything that smacks of no-income and no-documentation is history,’ said Allen Hardester, director of business development for mortgage broker Guaranteed Rate. ‘Anything above 85 percent to 90 percent loan-to-value, anything non-owner occupied, anything ludicrous as to value, like someone stepping up from a $1,000 a month payment to a $6,000 a month, is history.’”

“Lenders are also scrutinizing applications much more carefully, and many don’t like what they find. Lowman said he had recently looked at a low-documention application for a UPS driver who earned a quarter of a million dollars last year, or so the application stated.”

“‘If you took into account every person with a lawn care service on the side, there wouldn’t be a blade of grass left in the United States,’ he said.”

From Bloomberg. “New York Attorney General Andrew Cuomo issued a subpoena to the real estate appraisal unit of First American Corp. in his investigation of whether mortgage brokers pressured appraisers to inflate property values.”

“First American’s eAppraiseIT LLC, which values up to 15,000 homes a year in New York, was asked for information about appraisals performed throughout the state, President Anthony Merlo Jr., said in an interview.”

“‘It’s a very good thing, what the attorney general is doing,’ Merlo said. Cuomo’s office was focused on ‘who’s exerting the pressure’ on appraisers, he said.”

From Florida Today. “Troubles in the housing industry are not over, according to a leading economist with the mortgage agency Freddie Mac.”

“Amy Crews Cutts, deputy chief economist with Freddie Mac, said the big problems in the industry now are the continued large supply of homes on the market and the overuse in the past year of riskier ’subprime’ mortgages, a good number of which went to homebuyers who shouldn’t have received them in the first place.”

“‘The up cycle went so long, a lot of people in the industry haven’t seen a down cycle before,’ said Emile Haddad, chief investment officer for homebuilder Lennar Corp.”

“At the conference, the most pessimistic of the panelists was Mark Kiesel, executive vice president of Pimco Funds, a bond-management firm. In a report issued this month titled ‘Still Renting,’ Kiesel said he remains convinced that he made the right decision sell his house in early-2006, after owning a home for eight years.”

“Kiesel…expressed concern that an extended downturn in the housing market likely will lead to slower job creation, softer corporate profits, tighter lending standards, and weaker consumer and business confidence. ‘We’ve been sailing downwind on this boat for the last 10 years, and now we’re sailing into the wind,’ Kiesel said.”

“A sign of continued trouble, according to Kiesel, is that the inventory of homes for sale isn’t going down that much at a time when homebuilders are offering buyers incentives to make a deal.”

“Kiesel doesn’t see a quick turnaround for the industry. ‘This thing is going to drag out longer that many people think’ — a year or more, Kiesel said.”

“There currently is turmoil in the subprime segment of the industry, and banking trade groups are pushing for reforms, something Congress is considering.”

“‘We know it’s going to be bad,’ Cutts said, referring to problems in the subprime market. ‘How bad, nobody knows.’”

“Among the problems, Cutts said, is that many borrowers lied or misrepresented their financial positions to lenders, and there has been an increase in lending fraud in the industry. ‘The sophistication of the fraud is mind-boggling, and it is very professional,’ Cutts said.”