Monday, April 21, 2014

They be throwing up road blocks left and right.

My last nerve is on my last nerve.

You know I've been on this mad tear to get my rental appraised so I can get PMI off. The bank is trying to make me go away because I only refi'd 12 months ago. I completed it in April 2013. And hold your breath for this.....the bank is requiring 30% equity to remove PMI.

This is an usual number. The normal requirement is 20%. If you put 20% down on a house - no PMI. A house you do not live in triggers a 25% equity requirement. And a house that you apparently only refinanced 12 months ago requires 30%. Got it? I'm askin' because the rest of this should scare the shit out of you.

I think if things don't flip tomorrow I might make it. And even then, people are so clueless I still might make it. Sales are down, but prices are up. Those two things don't make sense.

So, I call the bank today and tell them I want an appraisal. Which by the way I pay for. They clearly were not going to let me get one without a fight. So I had to pull out a technicality.

When they refi'd me they didn't send an appraiser to the rental. They took a verbal appraisal from me. I'm sure because this whole renter thing would have come to a head much sooner if I had an appraiser out. Just on the off chance you might think that I forgot about a really stressful event like an house appraisal.

Here's the kicker though. They actually charged me for one. I'm sure at the time I thought it was bullshit but just didn't care. Now though, I'm forcing them to produce the appraisal report. I get to wait 30 days for them to try and produce a report that I'm positive doesn't exist. All the while hoping that prices hold.

None of this is gloating, because I'm pretty freaked out about the real estate market right now. My rental has gone up probably 50% in a little over a year. That place was underwater by a great deal up until around Jan of 2013. Then prices steadily started to rise. A house on the block over from the rental just went in 13 days. That is height of the bubble selling time.

The thing is - nobody seems to be bitchin' all that much about that kind of a price rise. I'm sure it can't last. Although in an environment where the government prints endless money - you can't be sure of what you are sure about.

Sunday, April 20, 2014

Nom nom nom.



Weekend warrior victory.



One of the kitchen tiles in the rental had a big chip in it and I'm trying to make the place look the best so it can be appraised. And thankfully I'd already learned how to take tiles out from another project we did late last year. Turns out, once you get the grout out - the tile will come out fairly easily. Of course, you need to use one of these Oscillating Multi tools to remove the grout. Don't go cheap. There are a bunch of other tools that claim to do this. And maybe they do. But this thing is worth it's weight in gold. It cuts pretty much anything. It's saved my butt close to a handful of times already. I'd already cut out the grout line by the time I took this picture.



Start near a corner and hammer a chunk out, then you can start using a chisel to pry the pieces you break up.



After you get the tile out you have to chisel out all the mastic so you can lay the tile the same height as the rest of them. Now I just have to go back and grout. Looks like it almost never happened.



Thursday, April 17, 2014

News from the housing trenches.

I met with my property manager today and gave her the keys to the rental. You know all I want to do is grill her for information because I can't figure out the market at all. And that freaks me out because I don't believe any of the stories I read. I believe you have to be in the market to know what exactly is going on in the market. And well... joy! That's me. (said in the most sarcastic way)

I'm trying to figure out what is going on with prices because I need to get my house appraised so I can get PMI off. Prices to me looked to be sagging after last October. So I was really nervous. I didn't think I was going to have to do so much work. I'd planned to get it appraised the end of Feb., so every month I was feeling like it was less and less likely for my place to appraise well.

So, I'm asking her a lot of questions about the market. I have to tell her about my PMI because I'm signing a contract with her to rent it. She's also a realtor, and I'm asking question like I want to sell. And hell - maybe I do. But I've got that low interest rate now. It will be interesting to see what happens to the accidental landlord demo because of those low rates. Anyway...

Then she casually dropped a bombshell on me. She said - oh, and you've heard about the new loans? PMI never comes off. I was so shocked that I had to ask her again. You mean that once you get enough equity, they wont let you remove PMI? Yes - she confirms.

Holy shit people. You better start saving your  pennies for a 20% down payment. Paying PMI is one of those things that nags at you. It's like throwing money away every single month. You put up with it because you know if you pay the loan down enough, they will remove it eventually. If that doesn't happen anymore - that really sucks.

Wednesday, April 16, 2014

I've found my limit.



This whole journey started in January because I wanted to have my place inspected so I could get PMI off my rental. This caused my renter to immediately give me notice. Which I was pretty happy about at the time because I didn't have to evict him. I'd been putting up with him because I was trapped in that exploding mortgage. Now I understand the hasty notice. My place was pretty trashed.

I was really thankful I hadn't fixed up the yards previously. Putting in a lawn is a pain you will not soon forget and having it wind up like the below pictures after that would have made me fighting mad. So while this crap is annoying, I'd still have had to doze the yard to get it flat so I could put in new sod. The neighborhood is cuter now. It deserves a cuter lawn. And really - I guess selling it is now my backup plan. Renting it used to be my backup plan while I was trying to sell it. You have to be flexible in the world we live in today.

The back was so overgrown that when they dozed it - I realized I had a giant tree I didn't even know was mine. I also realized this yard was much bigger than I thought it was.

Anyway. Three pallets of lawn later - the place is looking loved again. It's the biggest lawn we've ever put in ourselves. Three pallets is my limit. That takes you past your first, second, and third winds. It takes everything you've got. Everything.

After we got back to the house after putting the sod in Mr S. says to me - You know, I don't think we would have done this ten years ago. Which really surprised me. This is our third lawn. One day Mr S. went to work and I put in our front lawn by myself in four hours. He said - when you are younger you are stronger, but your mind is weak and I think we would have just given up.

All I know is that before I owned a house I had to find work out plans. When you own a house - you don't need a gym membership anymore. Your house will give you the work out of your life. This is how the guy left my place. He'd keep the front short so if you drive by, it didn't look that bad. My rental had a nasty mullet in the back though.







This chick means business.



You know if someone walks through your neighborhood with a three foot pipe with the end caps on - you'd take notice. Last year some old woman was carrying around a golf club for protection. I blogged about it here. It was just odd because I live in a really good neighborhood. I'm sure its to crack open the heads of dogs if she were to be attacked - but still - she makes a bold statement. And there is just something about it that makes me smile. Rock on sistergirl.

Friday, April 11, 2014

Another reason for low inventory.

I've been talking recently on the new psychology of the housing and rental market, Well, tonight I heard a strange new rumor. I've only heard it once, but it's really an unusual if true.

People who've had their houses on the market - and have gotten offers! -are now removing the listings because they fear they will become homeless because they can't find a new place to live. I've never heard that of that before. Housing and rental inventory is just that low. Read : Low interest rates will alter the housing market for decades.

It's really a surreal moment. The stock market is obviously starting to reverse, finally. Which will lock the market right the hell up. Banks really have their balls in a vice. I guess you can lead a horse to manufactured equity, but you can't force them to sell.


Pictures I should have posted.



I got this a couple of weeks ago in Los Gatos.



Thursday, April 10, 2014

I'm having a lawn baby.

Don't expect anything from me until Tuesday. I still haven't finished my taxes and my lawn baby comes on Monday. I'm not really ready - but the lawn comes no matter if I'm ready or not. And three pallets of lawn is going to really hurt. Really going to hurt.

Tuesday, April 08, 2014

Will Twerk for Food Stamps.



This is how sad our country has become. Saw this on the side of a boy scout bus filled with boys. Obviously! Even though I found it funny, guys twerking kinda gives me the queebies. There is all this side junk we all want to forget exists. I'm talking about your balls guys. No one wants to see that. Or maybe they have a stash of hundred dollar food stamps to make it rain should the opportunity arise. I don't even object to twerking. I just think in about 10 years you will look back and be mortified. It isn't going to exactly be your proudest moment.

Sunday, April 06, 2014

Napa Chalk Festival.



Today we took a break from all of our responsibilities and went to the Napa Chalk fest. I thought it would be amazing. It's Napa! It was more like Martinez, or Berkeley. Just so so. The picture above was really the best. The camera does it complete justice because it didn't have that depth in real life.

Hopefully these pictures will keep you entertained for a minute because I don't know what you are going to get this week. I haven't finished my taxes. I'm suppose to hand over my rental to the prop manager on tax day. And I decided to stick in a lawn. Thankfully I have two large tress that shade the yard. But this will be my third lawn and that will kick your ass. I'm pretty fully dreading it.

So - you might get nothing. I might freak out. (shrug) I'm sure it will be a surprise to everyone including me.

















Every once in a while you see the simple chalk outline at these things. Mr S. wanted to go big on that and make a whole crime scene. Which does sound dark, but also funny. You could sketch out spent magazine rounds, and the little police cones they stick near them. It's totally inappropriate obviously. Tons of kids go to these things. But if I saw that - I would laugh.







Friday, April 04, 2014

Low interest rates will alter the housing market for decades.

Over the past couple of days I've been reading article after article asking "Where are the sellers"? This sends me into a bit of exasperation. I can tell immediately these writers have almost certainly never owned a house. Houses are a number on a screen. They don't understand the psychology of the market now. I am not confused at all why sellers are well... not selling. The only thing that confuses me is how this will turn out in the end.

Presumably these writers think that as soon as people are not in negative equity they will choose to sell. But why would they? The 20% who are still deeply underwater have now been paying on their houses for at least 6 years. They had to have had pretty stellar credit and enough resources to keep paying their mortgages through arguably one of the most financially terrifying times in their lives. I know one guy who is still paying close to 7% interest. A couple of days ago he told me that he just got his house appraised. So, I know he is finally getting to go through the process. I'm not sure yet when he bought. It had to have been between 2004-2007. I've been watching this guy through the whole recession. Hoping he would make it. He wasn't speculating. He borrowed money from his house to build a commercial building for his business. Something that people have done as long as I've been alive. A very normal thing people do to get ahead in life.

I knew when the banks finally refinanced him home prices would be very nearly the top. Which we are. Some neighborhoods are skirting the top. My house is still "effectively" underwater. Which means I would still lose money, but I have equity.

Now, why would someone who's been paying 7% interest suddenly sell because he's magically not underwater anymore? Especially when he's gone through hell just trying to get refinanced for the house he has now? I can assure you - there are a lot of people who are too raw to take on the risk of buying a new house. He's been living that risk for 6-7 years! He's just gotten to the point where he probably feels like he isn't going to lose his properties. At least the place he has now - he apparently has equity or the banks wouldn't touch him. You know that guy has been fighting for his financial life. He is dead tired.

I  also suspected he was one of the people The Motley Fool wrote about in this article: Citigroup Will Soon Be Haunted by $19 Billion.

"Just when you thought the financial crisis was in the rearview mirror, a final aftershock is about to hit the nation's third largest bank by assets. According to Citigroup's (NYSE: C ) recent annual filing, nearly $19 billion of potentionally toxic home equity lines of credit, or HELOCs, dating back to the housing bubble will soon begin coming due. "

I couldn't just ask him. It's a really sensitive topic. But given his circumstances I was sure he was facing a reset soon. I was facing one in 2016. I had two years left. A couple of days ago he admitted that next year his HELOC was resetting. We were in the market about at the same time. No matter how good your credit was - it was impossible to get a loan that didn't reset. Impossible. It was all they offered. I'm sure because I don't take risks with loans. Even I wound up with a 10 year reset. I've always preferred a fixed rate.

Bright side is - hopefully since this guy is getting refi'ed, maybe the risk to the banks is not as severe as what people write about. They obviously know how this turns out. But no matter - prices still need to go up for them to refi you. Period. Which is going to be tricky. This segment is going to be risk adverse for a very long time. When you have a reset - every single day feels out of control because you don't know when interest rates are going to skyrocket. And you see how the banks treat their best risks. Every single day you are aware you could be shut out of the market even though you are a stellar risk. I was only paying slightly over 6% interest. That guy ... when you are paying 7% and almost everyone else is paying 4% - it burns like the surface of the sun. I assure you.

Now onto the segment of the market who's finally been able to refi. The 4%ers. Well... consider that market almost dead. I newly fit into this category. I have wanderlust for houses. But now that I'm in a low interest rate loan - it changes how you feel about moving. I hope it doesn't stick too long with me. But it can forever take a house out of rotation. Mr S's mom bought a house in 65 before interest rates spiked in the 70's. She never moved because she wouldn't have been able to afford a higher interest rate. And I believe a big segment of the refi group will never sell their houses. I know if I have this impulse, other people have it more.

In some ways the market is worse off than before. You have large swaths of the market that are in stasis now because the attitude of moving has changed quite dramatically. More people are choosing to be "happy where they are". Yet with economic growth pretty paltry considering how much the government spent- you have to wonder how they will stimulate the economy when the inevitable comes. Interest rates can almost not get any lower. Plus, you don't think the stock market goes up forever. Do you?

And then.... there are those pesky inventory rises. For the past few days I've been seeing articles that report that Sacramento has had an almost 90% side in housing inventory since the beginning of the year. Which is quite dramatic for three months. So, it's going to be quite the nail biter to see if those 20% underwater and HELOCs can make it before the market reverses. Sacramento doesn't seem to be alone. Las Vegas has had a 92% increase in inventory. The article was written from the buyers standpoint, because rising inventory means lower prices for buyers. But rising inventories are a worrisome trend for the overall economy. Really worrisome.






Thursday, April 03, 2014

Everything is fine. Look over there!

The health care segment makes up about 6% of the US economy. During the boom years, housing also made up about 6.3% of the economy. Source. 

I'm sure this isn't going to be as painful as that. I mean, at least you could escape that it you wanted by defaulting. Sure it took down the whole economy. We just don't know exactly in what way this too will take down the whole economy. If that really matters.

Tuesday, April 01, 2014

Ferrari jumps shark. Sadly not literally.



Seriously. My heart was not into getting glamour shots of this car. I think if you are rich enough to own a Ferrari, you can buy another car to haul around your spawn or groceries. And it definitely should not be used for hauling your grandparents around. Google it.







Monday, March 31, 2014

Squirrel using natures umbrella.



I couldn't get that great of a shot of him because I didn't want him to run.

Saturday, March 29, 2014

My car sugar is low.



Today the car show got rained out. So I decided to do a first run at taxes. I'm really starting late this year. Which sucks.

On the way back from breakfast I saw this car. Which I might have not even stopped for if I were at the show. I like the stuff you've probably haven't seen that often. But it looked nice in the driveway. I got a couple quick shots before the owners pulled in in due to the rain.



Friday, March 28, 2014

I finally tried Oculus.



I've seen it about half a dozen times at shows - I just didn't want to wait in the lines it took to play with it. Since good old Zuck bought them - I had to stick it out this time. How can I have a good opinion if I don't try it?

I have to say in advance I have a lot of biases about this product and facebook generally. I'm not as impressed as some because I suspect Oculus is building on an old technology called Smartscene that never really caught fire at the time. To be sure, it's impressive the footprint is so small now. But it isn't Star Trek exciting to me. They have improved lag time in the glasses to almost nothing. It's probably one of the reasons why SmartScene didn't make it other than being too early. If you moved your head too much over time, the lag would give you a swimmy feeling. The weight of the headset would also give the demo guys headaches. You also had to wear separate gloves to control the environment.

I still generally feel like people don't honestly like to wear glasses unless you have to. And it's still unknown how peoples brains will react to close vision viewing. As I wrote about before Google Glass users are starting to experience headaches. Even 3D glasses can make people feel queasy. I think these are product impediments.

Oculus is a somewhat isolated game experience. Yes, you can play multi player, but the person is fully immersed with the glasses and headphones. By default you are shutting out the outside world for full immersion experience. I think most gamers are more social than that. In fact - I think one of the problems the game industry is suffering from right now is that games are almost too immersive. A lot of gamers work. They just want to sit their ass on the couch and play a fun game for a few hours. These days you have to intimately get to know a character and mold it to a likeness of yourself. Seriously - it can take a half hour of set-up just to get through all the back story character trailers before you even start playing. Just let me play! The graphics are amazing to be sure. But I don't want to make a full time commitment to a game. I have stuff to do!

Before Zuck bought this company I figured they would just keep refining things. Now that Facebook is involved I don't actually have much hope of this. The gaming industry is a brutal industry. It takes several years to get out content that you aren't sure anyone is going to play. So, game companies play it safe and just make sequels. Every once in a while you get someone willing to take a chance and make something super amazing like Bioshock.

I think Zuck is the kind of guy who cares more about being popular than really building something that will last for a decade or two. If Sun Microsystems can fail - Facebook is just a tiny blip on technology history. Sun was the (dot) in .com. They were basically the backbone of the internet at the time. Without Sun - you probably wouldn't have webpages right now. That is how important Sun was on the scale of internet history.

Facebook? Not so much. No matter what he thinks.

I also have a side rant about Facebook. Because Zuck is talking to the White House about how mean they are for spying. Which is the most dishonest crap I've ever seen. I will tell you why.

I have a facebook account. It's a dummy account. None of the information I used to fill out getting signed up is real. Having said that - somehow facebook's algorithms managed to connect me to my real mother who has been deceased for quite a while. For a few months Facebook would send me emails asking "do you know this person"? In the way they do to make you connect with people. The first couple of times it was super creepy. I told Mr S. it's like she's trying to haunt me from the grave. It felt kinda fucked up actually. We were estranged. And I didn't remember the information I gave them so I could write them and tell them to stop. Plus that would only confirm their algos were right and I didn't want to do that. If facebook can figure out connections like that - they are spying quite a bit more than you think.

Thursday, March 27, 2014

My funny Obamacare story.

Since the recession I've gotten a whole lot pickier about who I want to spend time with. Before President Money Bags it was easy to ignore crazy stuff people believed. You could overlook a lot of things. They weren't affecting me to any degree. A lot of the crazy stuff they believed entertained me, honestly. Now I'm super selective because a whole lot of people are affecting me.

For example, I hold some really strong views on socialism. In a way, I was really born from the socialist utopia. My grandmother was on welfare her whole life. My mother was 14 years old when she had me. I still have family in government housing right this minute. I think it takes three generations to get off welfare. The old people you just write off. Honestly there is nothing you can do change their beliefs or education level. The next generation at least tries. And finally by the third generation if you are lucky - they escape. Yes, this is the background to my story. I have to tell you this because this particular story involves someone from my childhood. And you can kinda get an idea of the childhood and friends I had.

Before the recession she was doing really well. Super well. But the recession wiped out a lot of marriages. Now she is struggling. She works as a hairdresser. A self employed hairdresser. More about that in a second.

You saw my childhood right? Well my girlfriend from childhood was the biggest President Money Bags supporter ever. She was living right next to his taint she was so in love. My Aunt actually said he should be leader for "however long it takes". If I have time I'll try to dredge up that post. So... you can see how frustrated I was with them.

Yesterday I talked to my girlfriend who is now living in Seattle. As if she couldn't be douchier. She starts complaining to me about how she has to raise all of her prices because she is being hit with a 300 dollar a month Obamacare insurance plan. And she's really wanting me to follow her on the "can you believe this bandwagon". But I was having none of that. I'm actually not sure she will call me after it because first I told her this is what she voted for and that everyone has to pay.

She said she knows that everyone has to pay but she couldn't afford it. I told her we tried to warn them about this. Where she said - well, whatever - what we really need is socialised health care.

Now this is the kind of girl who doesn't own a TV. And gets all of her information from her hippy parents. Who I'm not even joking lived on a commune for a while. That was actually a thing when I was growing up. I've had two close friends who have lived on communes. Those people would not be my friends today. I don't care if you want to live on a commune, but forcing everyone else to kinda pisses me off. And that is essentially what Obamacare is. It's a commune for health care. Yet if I asked this girl to explain socialism - I bet you she couldn't.

Mr S. was actually in the car when I was having this conversation with her and overheard almost the whole thing. His response was - she thought she was going to get to sponge off everyone else, and now she realizes that old people are going to be sponging off of her and she doesn't like it. Honestly, right about now I'm not about letting them forget this was the choice they made. They can suck it.

Today I almost decided to say screw it and move to Texas.

I'm almost at the carpet stage over at the rental. I'd been given a referral from my future property manager. When the guy showed up - I knew him. He was the guy who put carpet in that place when I was trying to sell it. He's also friends with Alpha Contractor - the guy who helped me gut that place. I didn't know the carpet guy very well, but Alpha Contractor I've known for a really long time.

I guess Alpha contractor is getting married and moving to Texas. Which I was happy about. At the same time internally I was like.... effing Texas got another one.

You see - it's super hard to be a conservative in California right now. Super hard! I'm not a religious conservative. I'm an atheist. Alpha contractor however was a religious conservative. Even so, he was one of the most honest guys I've ever met. And that is just generally. He was like a unicorn in the contracting field. Contractor has con right in the name!

Anyway....I haven't talked to him since the real estate crash. I wasn't really sure if I was going to be able to keep my shit honestly. There were some really dark days. I mean - years.

He will love Texas. I haven't nothing bad to say about the place. The kindest people live there. Sadly with my fair skin - Texas thought I was too delicious. Mostly what I remember was constantly being eaten by mosquito's. I have a really bad reaction. If it weren't for that - I'd definitely consider Texas again. I think they might have even worn me down enough to move. And I love The Valley.

My gawd you don't know how much I love BBQ. You know the mosquito problem was huge. There is water everywhere.

Tuesday, March 25, 2014

I think it's going to get bumpy real soon.

October definitely was the top of the real estate market. Prices every month since then have declined. I'm glad I decided to put a renter back in the crapshack and not sell, because it's not a small change.

About a month or two ago I think I started reading stuff from San Diego where the prices were falling quite precipitously. An average house was having about hundred thousand dollars shaved off. I thought to myself - I hope this doesn't spread. But it looks like it has. It takes a few months to see if it's a blip or a trend, and it definitely looks like a trend. Even Calculated Risk has an article talking about it.

It's quite hard to figure out the market right now. Interest rates today are as cheap as they were in November. Almost cheaper. I refi'ed at 4.25, and it isn't that hard to get a loan in the 4.12 rage right now. Interest rates are not causing this problem.

New Mortgage rules did take affect Jan 1. You basically can not spend more then 43% of your salary on a mortgage. Which is quite strict actually. In California, for as long as I've been a rent paying adult, the standard was pretty much 50%. For rent/or mortgage. Prices will have to come down to accommodate for this.

The Fed is signaling they are going to stop buying bonds. Well.... good luck with all that. Stagnant wages, and job creation are not good enough to sustain a healthy market.

The other thing is - I think for the most part people are pretty locked in to where ever they are living. If you managed to save your house, likely you are paying something in the rage of 4.50% interest or less. That makes you not want to move as quickly. No one on this earth ever thought they would get a mortgage that low. It takes very bad times. And 20% of people ARE still underwater. It makes for a very stuck market generally. Since it's still pretty hard to get a mortgage the rental market is also pretty locked up.

It will be fascinating to see what happens to rents. They have gone up quite a lot. However, through the whole deepest parts of the recession, prices only fluctuated 5% up or down. They were remarkably stable.
 
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