Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Wednesday, May 09, 2007

Better Get a Roll of Tums...

....Something Wicked This Way Comes!

Wells Fargo & Co. CEO Richard Kovacevich said in December that ‘I am not a forecaster of the future; I’m a historian. And history says this will blow up. It always has. And there will be some blood on the street.’”

May 9th, 2007 - “Bank of America Corp. CEO Ken Lewis said a so-called credit bubble is about to break after six years of historically low interest rates and relaxed lending criteria.”

“‘We are close to a time when we’ll look back and say we did some stupid things,’ Lewis said. ‘We need a little more sanity in a period in which everyone feels invincible and thinks this is different.’”

Warren Buffett said: "... too many homes were bought by people carrying mortgages with little or no money down who then hoped to flip them quickly for a profit. 'The housing market is sick and it's going to stay sick for a couple of years' he opined."

“The National Association of Realtors said that sales this year will be lower than it earlier forecast. Carl Reichardt, a senior equity research analyst at Wachovia Securities, told that he wasn’t surprised by the lower projections.”

“‘We have seen deterioration in business conditions for the homebuilders that we survey in March and April,’ Reichardt said.”

“And it could still get worse, Reichardt said. ‘The homebuilding business has lost a portion of its customer base as financing conditions continue to compress,’ he said. ‘The housing industry has relatively modest job growth supporting it. If that leg is lost, housing could get worse.’”

William Lyon Homes today reported pre-tax income for the three months ended March 31, 2007 of $5,804,000, down 87%, as compared to the comparable period a year ago. Consolidated operating revenue decreased 33% for the three months ended March 31, 2007.”

Luxury home builder Toll Brothers Inc. said on Wednesday it expected to report lower quarterly revenue and warned that its profit would fall short of its own forecasts, as the protracted downturn in the U.S. home market worsened. ‘Twenty months into this housing downturn, we continue to face difficult conditions in most of our markets,’ CEO Robert Toll said in a statement.”

“‘We no longer expect to achieve the most recent quarterly and annual guidance we provided on Feb. 22,’ he said.”

Richard Dugas, Pulte Homes president and CEO, "told shareholders in Birmingham, ‘The worst may not be behind us.’ Dugas said he saw no signs yet of recovery after the worst housing slump since the early 1980s. ‘I think January and February appeared to be on the road to recovery, but after the subprime mortgage issue hit, consumer confidence took another hit, unfortunately, so I’m not sure there’s any light at the end of tunnel right now.’"


At 5/09/2007 09:06:00 PM , Anonymous tom stone said...

It isn't a silent spring,you can hear the whimpers of builders by turning on your car radio.please! we'll give you a free car if you buy in Chanate village! or was it canute village?good to see you back athena,godesses have been thin on the ground lately,except at whole foods.

At 5/09/2007 09:23:00 PM , Blogger Athena said...

Who in their right mind would live in Chanate Village? Have you seen those places? Who would look at that chithole in the making and aspire to live there?

At 5/10/2007 04:17:00 PM , Blogger Matthew said...

Ah yes, the sweet sound of wood framing and hammers being loaded back onto pick-up trucks for another day is reverberating throughout the landscape..

Speaking of Chanate, who in their right mind would buy in?.... oh, lets say..

Tulsa City

Farmers and "Sheeple".. that's who..


At 5/10/2007 04:58:00 PM , Anonymous Anonymous said...

“‘We are close to a time when we’ll look back and say we did some stupid things,’ Lewis said. ‘We need a little more sanity in a period in which everyone feels invincible and thinks this is different.’”

As Jayne Cobb put it when Mal had him in the open airlock when Serenity was breaking atmo over Ariel:


At 5/11/2007 08:04:00 PM , Blogger J at IHB and HFF said...

The 20/20 hindsight is very convenient, after they cashed in on the bubble and in time to cash in on the bailout (as I recently posted).

At 5/13/2007 01:33:00 AM , Anonymous Anonymous said...

I just want to buy a home.
This situation is ridiculous.
I won't pay these prices.
I won't buy in to these loans.

Shame on you, RE industry!
You know who you are.

At 5/13/2007 07:54:00 AM , Anonymous Ignatius said...

rode by Chanate Village twice yesterday afternoon (moved nearby recently), the free car was parked out front, no visitors the first time, and one group the second, lots of stationary signs as well as sign twirlers for a one mile radius....looks pretty grim. On a happier note I was able to quickly sell my place in Mendocino Co. last month by "discounting" it by about 10K, have spent too much time reading about the bubble to hold out for top price and/or foolishly chase the market down...


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