Great Economic News Today?

It now looks like the perceived economic growth of the last few years was not from the tax cuts for the wealthy, but from the FED's massive over stimulus after the dotcom meltdown in 2003-2005. Now that the punch bowl has been taken away; let the party end and the hang over begin.


Here is a summary of the great economic news today:


Homebuilder with a significant local presence (see City in the Hills) reported horrible numbers after the market closed. Hovnanian reported a significant loss this quarter and expects more losses in the quarters ahead. I have a feeling all that land they gobbled in the boom will turn out to be a very bad idea. From CBSMarketwatch.com:

Hovnanian Enterprises reported a fiscal second-quarter net loss of $28.1 million late Thursday. The homebuilder's Chief Executive Ara Hovnanian said the housing market has continued to slip further.

"The housing market has continued to slip further in many locations in terms of both sales pace and sales prices," Ara Hovnanian said in a statement. "The housing market weakened in the latter part of the second quarter and the slower conditions have continued into May."

He also said the company won't give earnings forecasts anymore because housing market conditions have become increasingly uncertain.

1st qtr GDP came in a sad .6%. From CBS Marketwatch.com:

Bulls and bears both agree U.S. growth was pathetic in the first quarter, rising at only a 0.6% annualized pace, the slowest growth in four years.

Dell to slash 8,800 jobs:

Dell Inc. on Thursday reported a slight drop in quarterly earnings and said it would slash 10% of its workforce, or about 8,800 jobs, in an attempt to cut costs and regain market share lost to the likes of rival Hewlett-Packard Co.

Casey is DONE! Finally!

Hat tip to Robert at EN.

Crabtree: Real estate insiders against 'truth'

From today's Bakersfield Californain:


Appraiser to stop releasing reports
Crabtree: Real estate insiders against 'truth'

BY VANESSA GREGORY, Californian staff write
re-mail: vgregory@bakersfield.com

Local real estate appraiser Gary Crabtree announced in a letter Monday that he will no longer provide news media with monthly reports that examine the local real estate market, saying that his business has been damaged because "industry insiders don't want to hear the truth" about a troubled market.

As a result, local lenders have ceased to give him appraisal assignments, Crabtree said in his letter, citing a similar "persecution" during the real estate recession of the '90s.

Michael Burger, a local commercial and residential appraiser, said that many home appraisers are probably coping with less business in a changing economy.

"Everything that has to do with the housing trade is slowing down," Burger said.
In his letter, Crabtree wrote that lenders have been asking appraisers to "hit" values in violation of the industry's ethical standards.

"That is absolutely true," said Ted Faravelli Jr., a spokesman for the California Association of Real Estate Appraisers. "I'm ashamed to say that."

Pressure on appraisers to deliver a desired home value is increasing as the real estate market cools, Faravelli said.

Recently, Crabtree has also alerted local, state and federal agencies to suspicious real estate transactions that he thinks may be examples of real estate fraud.

His letter bemoans a lack of interest on the part of regulatory agencies in this alleged criminal activity.

Central Valley homebuilder slashes jobs

More news on our "normal market" from The Central Valley Business Times:

The slow housing market is taking its toll on builders with Ennis Homes of Porterville saying it is cutting its construction and operation workforce by 25 percent.

The company says it’s the first time since it was founded 28 years ago that it has had to reduce its workforce.

The company is privately held. It did not reveal the number of employees being let go. The company reportedly employed between 100 and 125 prior to the announcement Thursday.

Ennis builds homes in the southern Central Valley, between Bakersfield and Fresno. It built about 400 homes in 2006.

More local foreclosure news

News from KGET on the "normal" market we are now experiencing. Be sure to watch the video.

From KGET news:

BAKERSFIELD - New numbers on home foreclosures in the metropolitan Bakersfield area, and they’re up—way up.

We checked with the people who publish legal notices and they said there’s been an alarming spike in notices of default and trustee sales.

These numbers are provided to us by Ann Marino, owner of the Daily Report.

There were just over 2,400 notices of default on home mortgages in Bakersfield during the last five-and-a-half months—a nearly 300 percent increase over the same period last year.

There were 1,140 notices of trustees sales from January through May of this year, compared to just 281 during the same period last year.

“I think a lot of borrowers were naive, young kids or old people excited about getting a new home and fell for the fancy financing,” Marino said. “We call it creative financing ... and then some were just gambling that their homes would be worth more but that just hasn't happened since the bottom fell out.”

Apparently no one is immune to the vagaries of the housing market it seems.

17 News has learned that the real estate mogul David Crisp and his wife are among the thousands of home owners and investors in trouble.

According to the Daily Report, Jennifer Crisp is in default on four homes she holds title to, worth about $2.5 million, including a Seven Oaks-area home.

Jennifer Crisp purchased that home last September for $1.2 million.

It sold just two years earlier for $630,000.

David Crisp, owner of Crisp Real Estate, is in default on two homes as well, with a combined value of more than $1.5 million.

David Crisp (& family) facing 8 foreclosures

From today's Bakersfield Californian comes an update on former real estate mogul (LMAO) David Crisp and family. Looks like the unwinding of his real estate empire is almost over.

According to public records he and his family (wife and mother) now face foreclosure on 8 homes. I think the only way of this mess is to sell some "sweet links" (see Casey).

One item of note in the story is a quote from Tim Cox, he is the clown who claimed that only a natural or man made disaster would cause home prices to drop. Did i miss a flood or earthquake?



From the newspaper:

8 default notices hit Crisp, family

BY VANESSA GREGORY, Californian staff writer

e-mail: vgregory@bakersfield.com
Wednesday, May 23 2007 11:20 PM


Eight properties owned by local real estate power player David Crisp and his close family members have entered the first stage of foreclosure in just the last six weeks.
Photos:

The Crisp family name appears more than any other on a list of local loan defaults valued at $500,000 or more since the beginning of the year, online legal notices published by the Daily Report show.

The name appears five times -- in notices issued to Crisp, his wife and mother -- among a list of 70 such defaults countywide since January, the online records show.

In all, more than $4.5 million worth of loans taken out by Crisp, his wife, Jennifer, and his mother, Tu, are now in default.

Contacted twice in the last two weeks, Crisp said he was not aware of any default notices. He could not be reached for comment Wednesday.

Tim Cox, owner of Crown Mortgage in Bakersfield, said home loans slip into default for many reasons and the situation tends to be "sad (and) difficult" on a personal level.

"Someone loses a job, some company has problems, there's a death in the family -- who's to say? But the trend is definitely up from previous years," he said.

The number of Kern County homeowners running into mortgage trouble has risen dramatically in the past year.

In April, 770 Kern homeowners entered some stage of the foreclosure process, according to RealtyTrac, a company that tracks foreclosures.

Compared with the same month a year before, the figure represents a 564 percent increase in the number of local homeowners with mortgage woes.

Crisp's wife, Jennifer, was named in the first of the notices of default on April 12 for a $400,000 loan at 12706 Lanai Ave.

Since then, three more loans in Jennifer Crisp's name have gone into default, including a loan for a $1.295 million property at 11219 Draper Court.

The home is a 3,764-square-foot property with five bedrooms, 31/2 baths and a pool, according to First American Real Estate Solutions.

David Crisp's mother, Tu Crisp, was issued notices that two loans in her name went into default this month. A third entered default but later had the default notice canceled.

David Crisp also was issued two notices of default this month, for a $398,790 and a $860,000 loan.

According to public records and First American Real Estate Solutions, the loans in default are:

* April 12: A $400,000 loan to Jennifer Crisp for property at 12706 Lanai Ave. entered default. She purchased the property for $500,000 on Oct. 5.

* April 20: A $1 million loan to Jennifer Crisp for property at 11219 Draper Court entered default. She purchased the property for $1.295 million on Sept. 20.

* April 27: A $629,962 loan to Jennifer Crisp for property at 12718 Locksley Drive entered default. Purchase details could not be located.

* May 10: A $767,200 loan to Tu Crisp for property at 12716 Crown Crest Drive entered default. She purchased the property for $959,000 on Aug. 23.

* May 10: A $860,000 loan to David Crisp for property at 1805 Grimshaw Court entered default. He purchased the property for $1.075 million on March 17, 2006.

* May 11: A $527,472 to Jennifer Crisp for property at 8702 Oak Hills Ave. entered default. She purchased the property for $659,500 on July 29, 2005.

* May 14: A $398,790 loan to David Crisp for property at 10805 Prairie Stone Place entered default. He purchased the property for $443,500 on Dec. 28, 2005.

* May 21: A default notice was issued to Tu Crisp. Details about the loan and property were not immediately available Wednesday.

In addition, one default notice was canceled.

A $367,960 loan to Tu Crisp for property at 12422 Woodson Bridge Drive entered default May 4. On May 17, the default notice was canceled.

-- Staff writer Gretchen Wenner contributed to this story.

Final April 2007 numbers - Bakersfield down 7.7% YOY

April 2007 numbers from DQ News.com for all of California, by city and county are out.

Bakersfield continued its downward decent. Some much for the Realtors who claimed prices would never go down. Also, these numbers DO NOT INCLUDE INCENTIVES! If the incentives were included Bakersfield (along with all other cites) would be down much more. I would guesstimate that Bakersfield would be down 10-15% YOY.

Here are some of the numbers of selected Ca Cities:


BAKERSFIELD -7.74%

CLOVIS -17.82%

LAGUNA BEACH -35.09%

PISMO BEACH -36.71%

SAN LUIS OBISPO -7.60%

High roller of home loans

From the OC Register.com comes another story on the rise and fall of a real estate mogul. Be sure to read the comments at the end of the story:

Daniel Sadek played Orange County's subprime lending boom like a card shark dealt the ace and jack of spades.

Just five years ago he was selling cars.

Then, in January 2002, he anted up $250 for a state lender license and started selling home loans through his company, Quick Loan Funding.

Over the next five years, Quick Loan wrote $3.8 billion in mortgages, lending money fast – and often on onerous terms – to people with shaky credit.

Boosted by high fees and interest rates – high even for the subprime industry – Quick Loan's after-tax profits averaged 29 percent of revenue. In 2005, Quick Loan's biggest year, profit topped $37 million.

Sadek used the earnings to live the high life, buying a fleet of Ferraris, Lamborghinis and Porsches, dating a soap opera starlet and producing movies. He flew private jets to Las Vegas, where he gambled with high rollers at the Bellagio Resort.

He cultivated a rebel image, wearing a beard and hair to his shoulders, dressing in T-shirts and flip-flops, eschewing the typical mortgage banker's pinstripes.

"How many thieves are wearing a suit?" he asks, sitting in the kitchen of his $4 million Newport Coast mansion.

Quick Loan Funding's name still crowns a Costa Mesa office tower. But Sadek, like the subprime lending industry, is holding a bad hand.

His staff, once 700 strong, has shriveled to about 125. Monthly loan volume plunged to $30 million from a record $218 million in December 2005.

Sadek says Quick Loan had to buy back $29 million in loans that defaulted in the first two months. That's a number that's likely to grow.

Today he is $16 million in debt, he says. Sadek says he raised $13 million for Quick Loan by selling his cars and refinancing his Newport Coast mansion, an Irvine penthouse and a Las Vegas condo.

He believes the company is a good bet.

"Tough times don't last," he says. "Tough people do."

Realtytrac Update

Latest numbers from Realtytrac.com:

Pre-Foreclosures - 2,833 properties

Auction - 545 Properties

Bank Owned - 1,260 properties.

Does this look like a "normal" market? Per the local real estate show on Saturday mornings, Bakersfield is in a "normal" market. Also, we now have 4,105 listings which is a 17.5 months supply and last week we had 160+ NOD's.

This sounds like a very bad market to me.

Castle & Cooke

I am not sure what is going on, but the Bakersfield Californian Blogs have several posts and comments by disgruntled Castle and Cooke employees (or ex-employees?). Looks like the local housing market crash is putting some of them in a very bad mood?


"Shame on Castle and Cooke":

"CASTLE & COOKE SHAME ON YOU AT THE TOP!!":

"CASTLE & COOKE BE RESPONSIBLE - FOR ONCE DO THE RIGHT THING":

Bottom over a year away

The guys at Pimco, who have been following the housing market very closely, have an update on their housing forecast. I encourage you to clink the link and read the entire story:

Based on the current outlook for housing, I will likely be renting for one to two more years. While many factors that influence housing prices have turned negative, I suspect we have not yet hit bottom. In fact, housing prices should head lower throughout the rest of this year and next year as well. Why? Housing inventories remain high, delinquencies and foreclosures are set to rise as homes purchased over the past few years by speculators and individuals with teaser-rate and adjustable-rate mortgages come back on to the market, affordability is low, and sentiment and risk appetite has shifted negatively. Most importantly, the availability of credit is set to take a turn for the worse as lenders tighten credit standards.

This is all great news for renters and buyers who are patient. Over time, housing prices and interest rates should decline, resulting in improved affordability. This adjustment, however, will take time and occur over a period of years, not months. Housing is illiquid and prices are sticky. As a result, potential buyers should exercise patience and not jump back into the housing market too early. A year ago, I described the state of the U.S. housing market as “the next NASDAQ bubble.” The NASDAQ took over 2½ years to go from peak to trough. I suspect that housing prices could display a similar pattern, and we are still over a year away from the bottom. Given these risks, I prefer renting versus owning, and an investment strategy which favors defense versus offense.

California homes sales continue to plummet

From DQ News:

California April 2007 Home Sales

by Real Estate Analyst John Karevoll
May 16, 2007

A total of 34,949 new and resale houses and condos were sold statewide last month. That's down 12.2 percent from 39,811 for March, and down 28.5 percent from 48,894 for April 2006. Last month's sales made for the slowest April since 1995 when 27,625 homes were sold. April sales from 1988 to 2007 range from the 27,625 in 1995 to 66,938 in 2005. The average is 46,141. On a year-over-year basis, sales have declined the last 19 months.

Indicators of market distress are moving in different directions. Financing with adjustable-rate mortgages is declining significantly. Foreclosure activity is rising but is still within the normal range, except for some inland communities that saw particularly strong activity during the 2004-2005 sales surge. Down payment sizes are stable and flipping rates and non-owner occupied buying activity is down, DataQuick reported.

A&E Flip this house EXPOSED!

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Click here for the video and more information

Over 17 months supply of homes

The numbers for April 2007 are out and 234 homes were sold in April 2007. This is absolutely horrible for those in the commission chain. Sales transactions are now down over 70% per month from their peak. I hope the local BMW dealership is ready for the slowdown.

This also means we have over 17 months supply of homes on the market. I have always been told that anything under 6 months is a sellers market, at 6 months is a balanced market and over 6 months is a buyers market. So what is 17 months, a ______ market?

Does this "Investment" cash flow?

Anyone out there looking for a negative cash flow investment?

The only way this Craigslist gem makes sense as an investment is if prices continue to go up. Even with the $50,000 price drop, which is a 15% decrease, this property still has no upside appreciation.

Also, the monthly nut on this "investment, including HOA, if financed at 100% would be approximately $1,400 per month. The current owner claims $900-$1,100 per month rent. Prices have a bit further to go before they become fairly valued.

I remember after the last local bust, the condos in this development sat vacant for years. Will that happen again this time around?

From the Craigslist posting:

Reduced for FAST Sale... 2 bed/2bath
Lakeview condo for sale, just 100 feet from the lake.

Located in the quiet and gated Hidden Lakes resort community next to Rio Bravo Country Club, the newly painted condo has a lovely fireplace, private rear porch, tall 9+ foot ceilings, and access to the community pool - just 100 yards away.

The lake is loaded loaded with large mouth bass and huge catfish. Walk out your front door and fish, or take a peaceful canoe ride and feed the ducks after a tough day at the office. Your canoe can be locked up at the lake, just 100 feet from the unit.

This location, the Rio Bravo NE area, is by far the most beautiful area in all Bakersfield. So many things to do in the immediate area; Lake Ming is 5 minutes away, as is the Kern River which has some of the best rapids for Kayaking, along with nice big trout for those who like to wet a line. http://www.isucceed.com/news/viewarticle.cfm?article_id=50076

Rio bravo country club is next door if you love to golf, along with a near by county course that is amazingly challenging. This area is now seeing a lot new growth, mostly home in the $500k - $1.5 million range. The real estate boom here will be great for propery value and lake frontage will always be in demand and will increase in value.

The views of the Sierra mountains are just out the back door. Lake views are out the front windows. 1 car detachd garage for parking your car, fishing rods, golf clubs, and bikes.

Great rental history if you want to buy it as an investment, or 1031 exchange. $950-$1100 per month and keeps rising because it's lakeview/lakefront.

Call Glenn at 805-236-0210 if you'd like to see it. Our tenant is relocating at the end of the month so it'll be vacant then.

We are already getting calls and appointments lined up, so call now. ps- realtors welcome at 3%.

Hurry to beat the bank

According to the realtor, this home at 9305 Kingsmill Lane is on the verge of foreclosure. The listing in this weekends newspaper states "Last chance, bank says sell or FORECLOSURE", "steal me" and "Hurry to beat the bank".

This home was purchased on December 30, 2003 for $305,000. Where did all the equity go? This new list price is $146 per square foot.

Here is the listing from the local MLS:

4th Price Cut! Now$45,000 off! $146/sq.ft! Best deal in Riverlakes! Hurry FORECLOSURE is CLOSE! Beautiful,quiet,secure,private,GATED with SECURITY
PATROL,surrounded by Riverlakes golf course! Great location close to golf, shopping,dining,& excellent schools.Built 2003.Upgrades thru-out! 4BRM
plus big OFFICE/bonus room,2.5 baths,great SPLIT-WING floorplan,deluxe granite-topped island kitchen,walk-in pantry,extra storage & closets,big laundry rm w/sink & cabs, full-sized bedrooms, blt-in lighting & more!

Inventory update

4001 listing(s) found.

The number of listings found exceeds the limit for this search. In order to optimize system performance, the maximum number of listings allowed is 50.


ALERT!!!

At this time last year we had 2,900 listings (May 9, 2006).

Someone remind me how the supply/demand curve works on pricing when supply goes up (dramatically) and demand drops (significantly)?

IRS Says New Century Owes $400M

From the Houston Chronicle:

WILMINGTON, Del. — Add the taxman to the list of government officials worried about the finances of New Century Financial Corp., the once-giant subprime mortgage lender that crashed into bankruptcy last month.

Mary Wright, an adviser with the Internal Revenue Service, said at a meeting of creditors Tuesday that New Century appears to owe the U.S. government at least $400 million. She said the Irvine, Calif., company and several of its subsidiaries hadn't filed corporate and payroll-tax returns.

She said the IRS is conducting an examination into the matter.

"We want to make sure we have accurate assessments," concerning New Century's liabilities, Wright said. The IRS has tried to get additional information from New Century, she said, but the company hasn't returned the agency's calls.

A New Century representative denied the company is behind on its taxes

Crisp "I can't make payroll for you guys"

From today's Bakersfield Californian:

BY RYAN SCHUSTER, Californian staff writer

e-mail: rschuster@bakersfield.com

The company formerly known as Crisp & Cole Real Estate Inc. is in the midst of reorganizing and downsizing as the local housing market continues to cool.

Local real estate magnate David Crisp has formed a new company, Crisp Real Estate Inc., and operations at Crisp's in-house mortgage company, Tower Lending, have ceased. Crisp's California Avenue offices have closed, plans for new offices have been scaled back and several employees have been laid off.

"It's a result of the downturn in the market in Bakersfield," said Jack Doremus, the former broker of record at Crisp & Cole Real Estate. "People are losing their jobs everywhere."
Crisp declined to address any of the changes in detail.

"It doesn't concern anybody else," Crisp said. "It's my business."

Doremus, who is now sales and production manager at the RE/MAX Magic office in Bakersfield, said he resigned from Crisp & Cole in late March after Crisp told him and five others with high salaries that Crisp could no longer pay them.

"He said, 'I can't make payroll for you guys.' So we left," said Doremus, who said he has remained good friends with Crisp. Doremus said the four others with backgrounds in fields such as human resources and bookkeeping have also landed at RE/MAX Magic.

Crisp's new venture, Crisp Real Estate Inc., was licensed as a corporation by the state Department of Real Estate on April 19.

"Crisp & Cole Real Estate is no longer," Doremus said. "They wanted to form a new company. It's all been switched over to the new name."

Carl Cole, the other half of the former Crisp & Cole partnership, stepped away from the company last year but has remained active in plans to build twin high-rise towers on Cal State Bakersfield's campus. Cole said the towers project -- which has recently shrunk from 32 to 24 stories and is still seeking financing from investors -- will not be affected by changes at the real estate company.

Tower Lending closed its last two loans in March and Crisp is now using another mortgage company, Cole said. Cole said that although he remained the broker of record at Tower, he hasn't had any direct involvement with the company in recent months.

"David was running that company," Cole said. Cole declined to comment on other changes at the company formerly known as Crisp & Cole.

A building that had been slated to become a new home for some Crisp & Cole operations has been put back on the market by Crisp. The approximately 10,000-square-foot building in University Place across from CSUB is listed for sale for $4.5 million. Crisp is listed as the property's selling agent on the Bakersfield Multiple Listing Service property listing.Crisp purchased the building from Bakersfield University Partners for $2.5 million in late April.

As recently as last year Crisp and Cole said publicly that they planned to move Crisp & Cole's California Avenue operations into the University Place property that Crisp purchased and an adjacent leased building on Stockdale Highway. The California Avenue offices have since closed.

The company has signed a 10-year lease with developer Gregory D. Bynum and Associates Inc. on an approximately 5,000-square-foot building next to the property that is for sale.

Greg Bynum, owner of Gregory D. Bynum and Associates Inc., said Crisp & Cole originally planned to use the leased building for Tower Lending. The larger building next door that Crisp & Cole bought was to become home to the company's real estate operations, Bynum said.
Crisp said the leased building is large enough that a second building won't be needed.

"We have enough room in the other one," Crisp said.

Crisp called the change in office space plans "just a business decision" and referred to the building being listed for sale as "an investment."

The high profile real estate office of "Crisp & Cole" is no more

Thanks to reporter Kurt Rivera at Eyewitness News we have confirmation on the Crisp and Cole story:

From Eyewitness News:

Crisp selling new real estate office

29 Eyewitness News has learned the high profile real estate office of "Crisp & Cole" is no more, at least on paper.

According to state records, just last month the "Crisp and Cole" headquarters in the Bakersfield Town and County shopping center is now listed as Crisp Real Estate, Inc.

However, their signage hasn't changed.

29 Eyewitness News has also learned the once future real estate office for Crisp & Cole at 8800 Stockdale Highway is now for sale and it's David Crisp who has it for sale. The building's developer, Greg Bynum, confirms the sale to Realtor David Crisp just over a week ago. The current listing price $4.5 million.

Carl Cole, Crisp's former partner, is currently under investigation by the Department of Real Estate for using an unlicensed broker. The state says the alleged broker was involved in more than 50 real estate deals while Carl Cole was in charge. Cole says once he learned his employee was unlicensed, he fired him.

Story Created: May 7, 2007 at 7:59 PM CDT

NEW exposed by the Washinton Post

Nice expose on the loan approval process at NEW, before they went bust. From the Washington Post:

Maggie Hardiman cringed as she heard the salesmen knocking the sides of desks with a baseball bat as they walked through her office. Bang! Bang!

" 'You cut my [expletive] deal!' " she recalls one man yelling at her. " 'You can't do that.' " Bang! The bat whacked the top of her desk. As an appraiser for a company called New Century Financial, Hardiman was supposed to weed out bad mortgage applications. Most of the mortgage applications Hardiman reviewed had problems, she said.

Hardiman cringed as she heard the salesmen knocking the sides of desks with a baseball bat as they walked through her office. Bang! Bang!'

But "you didn't want to turn away a loan because all hell would break loose," she recounted in interviews. When she did, her bosses often overruled her and found another appraiser to sign off on it.

Hardiman's account is one of several from former employees of New Century that shed fresh light on an unfolding disaster in the mortgage industry, one that could cost as many as 2 million American families their homes and threatens to spill over into the broader economy.

"The stress in that place was ungodly. It was like selling your soul," said Hardiman, who worked for New Century in 2004 and 2005. "There was instant notification to everyone as soon as you rejected a loan. And you dreaded doing it because you paid for it. Two guys would come with a bat, and they were all [ticked] off because you cut their deals."

Salespeople were supposed to be the "first line of defense" against fraud and bad loans, said Steve Krystofiak, president of the Mortgage Broker Association for Responsible Lending, a group that is trying to retool practices in the industry.

But salespeople worked on commission -- meaning the more loans they sold, the more bonus money they received. "That's a bad business model. It's absolutely contradictory," Krystofiak said, adding that he has witnessed salespeople tweak numbers in mortgage applications to ensure that the loans would be approved.

Crisp and Cole is no more

This blogger has learned that the once high flying local real estate firm Crisp and Cole is no more. Several items in the form of emails and readers comments have come to this blogger to confirm this story.


Brokers and Agents

These items include the broker of record Jack Doremus moving to a new company, RE/Max Magic on California Avenue. However, per DRE records Mr. Doremus is still the the broker of record. I am assuming the paperwork has yet to be filed?

DRE records also show that Crisp and Cole only has two agents listed, David Marshall Crisp and Lindsay Allyn Roberts. This is significantly less than the number listed on their website.

Several of the agents listed on their website are actually with other brokers. For example, Scott Reynolds is now a member of RE/Max Magic (Banducci and Associates). Mike Munoz is now also a member of RE/Max Magic. Maybe the Magic at their new location will be a little longer lasting?

This blogger has also learned that several other non-commissioned staff were also recently let go.

All listings in the local MLS have been transferred to a new entity Crisp Real Estate

New Corporation

On October 25, 2006, a new corporate entity was filed with the California Secretary of State, Crisp Real Estate, Inc.

Also, a new license was filed with the Department of Real Estate effective on April 19, 2007. The licensee name is Crisp Real Estate, Inc. The new Broker of record for this entity is Ty Stewart. The list of agents includes most of the former members of the Crisp and Cole Team.

What happened?

What happened to the once high flying firm. Did the overhead get too high while real estate transactions have fallen by 70% from their peaks. Did a local real estate firm need several Jets, $500,000 cars, Armani Suits, "meetings" in Las Vegas and body guards and $50,000 watches.

Will the allegations which include "negligence, fraud or dishonest dealing, substantial misrepresentation"against the pair's Tower Lending Company turn out to be true?

Why is the "moguls" headquarters empty and for sale?

Will the Twin Towers at CSUB be built? Can public land be turned over to two individuals who could not continue their real estate firm for more than two years? I hope the trustees at the CSU system take a good hard look at their proposal and finances before they turn this land over to these guys.

It now appears that the boom Crisp claimed would to continue, "Bakersfield has another two or three years before it "levels out", has gone bust! Foreclosures are up dramatically, sales are down significantly and the local MLS has been flooded with a tsunami of listing.

$14,000 per year field worker buys $720,000 home

I posted this story over at the Bakersfield Californian Blog: , interesting comments...


Despite making only $14,000 a year, strawberry picker Alberto Ramirez managed to buy his own slice of the American Dream. But his Hollister home came with a hefty price tag - $720,000.

A year and a half later, Ramirez has defaulted on his loan, and he's hoping to sell the house before it's repossessed. And according to many housing advocates and civil rights groups, Ramirez is not alone. As mortgage foreclosures rise, many minorities are suffering.

Brown said the language barrier (Ramirez, a native Spanish speaker, is not fluent in English, and spoke to the Free Lance through a translator) can also play a big role."When you go into Washington Mutual ... you can't always get someone to speak your language," she said.

"The real estate boom covered a multitude of sins," Simmons said. "Once the market started depreciating, the rug was pulled back to show the rot underneath."


Hollister Free Lance

Building permits crumble.

It is estimated that 70% of the jobs created the last 5 years, during this speculative mania, were REIC related. Any decrease in these jobs via layoffs in the construction business or realtors/mortgage offices will only add to the coming pain.

News from Howdy Miller on the sharp decrease in building permits. I have the pdf file, however, I am unable to load here. If you are interested please email me and I will forward to you.


From the Bakersfield Californian:

Building permits hit 7-year low


BY VANESSA GREGORY
Thursday, May 3 2007 6:30 PM

In another sign of a stalling real estate market, the number of permits issued to build new homes in Bakersfield dipped to its lowest point in seven years during the first quarter of 2007, according to a report prepared by Howdy Miller of Ticor Title.

The city issued 689 new home construction permits to builders from January through March, compared with 1,380 during the first quarter of last year and 1,269 -- a record high -- during the same time period in 2005.

Halted construction in Bakersfield and Kern County mirrors a larger pattern. Nationally, building permits fell by 25.9 percent in March from the same month in 2006, according to the U.S. Census Bureau.

Locally, an excess of available homes, high land prices and investor speculation during the real estate boom of recent years combined to sideline small builders and cause large developers to scale back building plans, Miller said.

KB Home, a national builder with a large Bakersfield presence, canceled a planned subdivision last year because of high land costs.

In the construction community, local businesses may already be feeling the impact of less building activity.

Corky Martinez, owner of C. Martinez Concrete, didn't need to see a tally of building permits to know construction had slowed.

"After the first of the year, it didn't slow down," Martinez said. "It just shut down."

Underwater

From Eyewitness News comes a solid piece with tons of details on sellers who are underwater on their homes:

Homeowners find mortgages cost more than they can sell for

The real estate market is getting so bad that some homeowners are finding that
their mortgages cost more than they can ever sell their house for.

In March, sales of existing homes had their steepest decline since 1989 forcing sellers to drop their asking price by four times.

Susan Adkins of Trying to Sell Home says "You lose your investment in the house, but now we're going to lose significant equity too."Would be buyers with weak credit are also having a hard time getting loans.

Realtors add that prices have plummeted whether you're selling a house for $100 thousand dollars or $100 million dollars.

Real estate mogul (LOL) headquarters for sale?

Remember the damage control pieces from last year by the Bakersfield Californian and KGET 17 where the reporters claimed these real estate moguls were moving into their new headquarters asap.

Not so fast. Per my review of the local MLS I came across the following:

Nothing like this in Bakersfield! This newly-finished building has it all. Its modern-style architecture perfectly fits its classy and open floor plan almost 10,000sq. ft. in size! Exceptionally located across from CSU Bakersfield, near shopping & restaurants, close to Mercy Southwest, & other medical facilities, makes it the perfect business location. Additionally, it is also located steps away from The Bakersfield bike path which allows for invigorating morning runs or lunch-time strolls.

I wonder why they are selling it? Will they get $4,500,000 for it? Will the newspaper or KGET do some followup on this story (LMAO)? Why is the building empty right now?