I’m Outta Dough St. Joe Edition

July 24, 2008

Did you know that St. Joseph was the patron saint of real estate? Did you know some of our local real estate agents are praying to him? I heard on NPR yesterday that you are supposed to bury one or two St. Joe figurines upside down by your real estate sign. According to NPR, absolutely no one can explain why this particular ritual would work. Why upside down? Nobody knows. If you are doing this practice and know why, email me.
It is obvious that St. Joe is just laughing bitterly at them letting them twist in the wind created by the bursting of the bubble of their own creation. Okay, there is a lot of blame to go around — banks, mortgage brokers, the press (including the Marin IJ), Wall Street, Flip-Those-Houses-Shows, property tax collecting municipalities, and even the buyers themselves. The thing is that the average consumer learned to trust all these professionals telling them that these schemes were fullproof. Housing prices will only go up if they acted right now.

I have been looking at Foreclosure.com at my neighborhood stats on preforeclosures, foreclosures, sheriff sales, for sale by owner (FSBO), tax liens, and bankruptcies. I looked just in my zip code 49403 and it may not be as bad as some locations in the east bay or central valley, or as bad as Novato.

In the 94903 zipcode alone there are 98 Tax Liens, 62 Preforeclosures, 18 Foreclosures, 4 Bankruptcies, 3 For Sale By Owner, an 2 Sheriff Sales. Even on my own street there is a pre-foreclosure for $600k in the whole and the house has been on the market for several months. It is currently on the market for 599k. Keep in mind that this house was on the market during 2005 for $800,000 and sold for $750,000. The taxable value is $780,300. It lists an improvement value of $348, 482. The last time I walked through the place it didn’t have almost 350k worth of improvements to it.

It looks to me that a family is in severe financial ruin and it appears Merrill Lynch Mortgage in Jacksonville, Florida allowed it to happen. This was a property I knew should never have been $800k, $750k, or even $599k. It is a 4 bedroom house, but the bedrooms in this Cape Cod are more like closets than real rooms. At the time this house sold back in 2005, it appeared that the Kitchen had bottom of the line appliances thrown in. Looking through the data, 2005 appears to be the year of insanity.

This is a house that went for 14k in 1955. These houses were originally built to be affordable for families back then. The only way back to affordable housing is for people to stop paying outrageous amounts for houses.The only reason houses got so damn expensive is there were plenty of people who were willing to go deeper into debt to out-bid another person who was willing to go deeper into debt. Prices are what the market will bear, and the market is YOU.

This madness now effects those of us who did not participate in this craziness. It effects the local tax revenues at a time where our state has decreased revenues. It will effect our schools and vital services at a time when they are most heavily taxed. It effects our local economy because no one has the disposable income to buy home improvement or any services. As I mentioned in the Marinwood Plaza post, this bubble bursting will effect whether there is any money available to build commercial/retail developments to rid ourselves of our existing plaza that is the ultimate definition of blight.

I am feeling quite sad and pissed off right now about this considering there were people all along who were telling us this was going to happen and they were just called doom-and-gloomers. Bah.

I have a feeling that Saint Joe ain’t happy to help either.

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