L.A. foreclosure chart looking "like a ski jump"

News item from Bloomberg News: "New foreclosures almost quadrupled in Los Angeles and doubled in Miami in the second quarter, with as much as $5 billion worth of loans going bad in L.A. alone, the onine real estate data company PropertyShark.com reported."

More: "The number of homes scheduled for auction in Los Angeles rose 14,505 compared with 3,797 in the same period a year earlier, PropertyShark said... 'The foreclosure chart for Los Angeles is unfortunately starting to look like a ski jump,' Adina Dumitru, a member of PropertyShark's foreclosure products team, said in the statement."

More evidence the foreclosure story continues to be a regional one: The foreclosure rate per houshold in Los Angeles is seven times higher than Seattle, and 15 times higher than New York City, according to PropertyShark's analysis.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Getty Images

Comments

[D]

The Los Angeles Times today announced plans to cut 250 positions across the company, including 150 positions in editorial, in a new effort to bring expenses into line with declining revenue. In a further cost-cutting step, the paper will reduce the number of pages it publishes each week by 15%.

He also noted that the poor economy had struck particularly hard at the California housing market, traditionally a robust source of advertising revenue for The Times.

[Cal]

It shouldn't be a surprise to anyone. The number of people who used "affordability" products, loans with Interest Only and/or Neg am features is extremely high in the Los Angeles area. There are two ways to build equity (or lessen the amount you are underwater), paying down the loan and appreciation. Many aren't paying down their loan balance and we all know what is happening with appreciation.

There is a whole feedback scenario that is happening in some areas while others are just ground to a halt (basically). And that is the choice, either very low sales and low affordability or a return to a normal market. But the realtor pipe dream of lots of sales and high prices simply won't happen. It only happened initially because it was an irrational bubble that ship has sailed and reality is back.

And I haven't even mentioned the economy or interest rates, just a return to a bit of down payment and documenting income is enough to implode it all.

[CD]

Off subject but CNBC financial did mention Richardson today and Dodd/Obama favored nation loans. Trichet from the EU will raise the rates due to their incredible inflation, the dollar will go further down and our goose is cooked. Watch the price of oil going up. We need a revolution in this country, gee is it a coincidence, it is all happening the 4th of July week-end.Thank you Patrick.net ,Nouriel Roubini and Calculated Risk. Bye, Bye Realtards !!!!!! "Grapes of wrath" here we come.....

[Uncle Billy's Worried]

Reassure us please, that this will not affect laland, nor its intrepid blogger.

[MyLessThanPrimeBeef]

Heaven has no doom like boom to bust turn'd,
Nor Hell has gloom like a cheap currency scorn'd.

I think Bin Lackey is aware of this and the Rate Cut Cavalry is not coming to the rescue.

[Fred]

Really, just read Cal's post (#2), since he is wise. I don't think most people have woken up to how bad things are going to get, housing and otherwise.

Welcome to the Greater Depression.

[LeftLA]

Fred: If you're an Eyore who has decided the US is finished, then just get the hell out now. Let the rest of us who know better rebuild.

[anonymous]

Nice phrase on Greater D, Fred. Yes. We basically do not know how bad it is going to get. The credit / business freeze up has just gotten started. Option ARMs, DOW headed back under 10, 9, 8 - I'm predicting 7 by 2010.
Fuel prices not coming down - but our low interest rates are part of the problem - devauling the dollar, of course oil is up.

Read an article recently, by Peter Schiff posted at Barrons. Goes through the 30 year credit cycle which we've been kidding ourselves with. Now, no manufacturing value, and nothing saved - US dominance is over. So of course our shacks will be worth way less. And anyone who doesn't see this is just getting started, just doesn't read enough articles on major newspaper sites - opinion & business or business & investing sites. It's all out there. Here's the URL

http://tiny.cc/E25kC

[bottom line]

neg-am > cancer, far more fatal, & in a freakin' hurry......

[Radical Raul]

"And I haven't even mentioned the economy or interest rates, just a return to a bit of down payment and documenting income is enough to implode it all."

Now does anyone here have a solution other than some greedy real estate broker saying we hit bottom and now it's time to buy and get more free money just because you are special.

SOS

[sailor7x]

Nobody should worry about..............Pete losing his job, he has been on national news shows recently. It will be the reporters you've never heard of getting the ax.

[Jeffrey]

Am I the only one who thinks all this is a set piece to devalue the dollar to on par with say the Peso in order for NAFTA to become like say the EU with one common currency representing Canada/USA and Mexico?

[Jeff D]

Thanks for the Peter Schiff Barrons link. I've been following his work for several years and agree with much of his thesis, particularly since he laid so much of the scenario currently unfolding so accurately in his book "Crash Proof".

One area I disagree with Peter is his idea the rest of the world will prosper while the US falters. I think he's dead wrong about that. Will they get hurt as badly as they would have several years ago in this same situation? Probably not, but it's foolish to think the US is going to implode and the rest of the world will be fine. That just isn't going to happen.

No, this is going to be a massive global depression!

[john cran]

70% of Californians are users & abusers so they deserve everything they are getting & more. Up you all Cals

[Anonymous]

I sure hope Peter doesn't get the axe- this forum is one of the few things that may survive The Times's inability to adapt to the present realities.

Ironic the new owner is a real estate speculator unable to may his payments and in need of quick cash. Maybe some sheik will buy the Cubbies... I doubt the Major League Owners would let that happen.

I was afraid when they dumped The Times this would happen. The Chandler trusts couldn't handle the paper any more and they ended up just dumping it for some quick cash.

The best we can hope for is Sam gets bought out soon.

[bobsuruncle]

Generally it is the well-paid reporters who will feel the pain first. More sad days at the Times. I suggest everyone who reads this blog to go and click one of the many ads to show their support.

[nls73m]

zzZZzzZZzzZZ

same ol' story here in laland.

yes, we know times are tough
yes, we know gas is expensive
yes, we know many homes are in foreclosure

zzZZzzZZzzZZ

[keith]

Am I the only one who thinks all this is a set piece to devalue the dollar to on par with say the Peso in order for NAFTA to become like say the EU with one common currency representing Canada/USA and Mexico?

Posted by: Jeffrey | July 02, 2008 at 11:53 PM

Yes, you are.

[JPG]

And yet no down mortgages are still available, generously backed by us taxpayers through the FHA:

http://tinyurl.com/3qels6

If you listen to the audio of the story that played on air this morning, you'll hear that the FHA is already projecting it will need over a billion dollars EXTRA from congress next year largely because of defaults.

It also says that the program is designed to help low and moderate income buyers get into homes (without having to save any money of course). Ah, more like it's designed to increase business for bankers and other lenders.

[anonymous]

Jeff - I'm not arm in arm statement for statement with Schiff either. I think when the US suffers, global trade will suffer. As we now are experiencing worldwide slowdowns. I think you'd agree with me that the Schiff artical brings some breadth to the spectrum of this blog which is focused on the feedback loop within real estate & RE financing. My point is - this mess goes way beyond foreclosures - the feedback loop goes to global banking & global business, which again will circle back and further depress prices and keep prices flat whence they hit bottom for possibly a long time. This is also the reason I think that the commonly referred to bottom of 2001 prices plus inflation adjustment, is too optimistic - not only for the bubble pop cheer squad but for the housing permabulls and realtors. Time will tell.

[RD]

Me being a first time home buyer Im loving this. I knew when I was looking a few years ago the bottom would fall out of the housing market. Prices just went way too high in too short of a time. Smartest decision was me deciding not to buy then. I now have an incredibly vast inventory to choose from. Throw in a large earthquake to scare all of the wusses away and that will be the icing on the cake for me if it happens.

[DBC Reed]

Henry George was on top of this situation 100+ years ago.
A pity the All-American radical, a serious rival to Karl Marx , was not listened to when he ponted out that real estate bubbles lead to poverty. The title of his best-seller Progress and Poverty says it all, though it might be as well to read abit more of it.