Bits Bucket And Craigslist Finds For October 20, 2006
Post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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here is the update from the ryland conference call
canrate 43%!
67000 lots 50% owned/50 optioned
lots locatet 12k california, 25k southeast, 16,5k north, 13,5k texas
debt to capital ratio 46% target year end 40%
bookvalue 32,50$
little exposure to joint ventures , only 13,5 mio$
not chasing volume like other builders
bought almost no land in washington dc in 2005+2006
san diego ugly, fort myers and naples floodes with speculaters
1950 spec houses / 50% under construction and 50% already build
landprices have to come down at least to 2004 levels before ryl will buy more (depends on region)
7.5 mio$ from landsales in the quarter. 7.2 mio$ from a flip on land in sacramento
writedown not imminent! when no recovery in 2007 the strategie not to chase volume will lead to bigger writedowns for sure . (good luck)!
plus one impotend number from the Collateralized loan obligations
article
Homebuilders alone account for about 5% of loans outstanding!!!!
sound to me very high but if this number is correct it is really shocking.
http://immobilienblasen.blogspot.com/
I’d like all you Californians who think Texas is such a gimme to invest or buy to read this thread. They hate me over there but I could have saved this guy from getting into this deal. He’s dealing with local DFW brokers, bankers, etc. who see suckers like this and other 1031 cowboys coming.
Texas is much more difficult to invest in than California, that is, if your goal in “investing” is to actually make a profit.
http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=1455735
Oh you’re not hated over there…you’re just underappreciated. They’re not allowed to write “depreciated” because moderator Greg will move it to his lock and yawn threads
I couldn’t read past the first sentence in the letter:
It is a little ironic that the outcome of this project paid all those involved with the exception of those who took the risk.
Umm, actually not ironic. By design. Apparently this poor tool doesn’t understand the rules.
My compliments to all of you who can tolerate (and make comments to) BS like this.
Exactly what I thought.
After reading that sentence (waaah!), I couldn’t stomach another word of that SOB’s sob story.
Funny how the definition of “risk” doesn’t seem to include the possibility of losing money.
I’ll make this offer here on this blog to Zimmerman and anyone else on SDCIA who reads this and is interested in investing in Dallas residential RE. I would not recommend it but if you’re strong of stomach and can tolerate risk, I know a few small parts of town where if you buy right, you can probably make some money fairly easily. You can email me at gymnastgal32 at yahoo dot com and maybe if you’re nice enough, I’ll pass along a bit of local intel for you. Maybe even a few addresses to look at.
It is a little ironic that the outcome of this project paid all those involved with the exception of those who took the risk.
Bwaaahahahahahahahahahahahahahah.
No, no it isn’t. When you see why it isn’t, you’ll truly be a “Creative Investor.”
Until then you are a “Creative Sheep” waiting to be fleeced.
” It is a little ironic that the outcome of this project paid all those involved with the exception of those who took the risk. ”
That’s not irony, that’s the definition of risk. What a moron.
NYC update.
Just found a website I had not previously seen that is NYC RE centric.
This guy gives specific advice about how to lowball effectively IN NYC, and suggests adresses that are ripe.
http://www.urbandigs.com/2006/10/timing_a_lowbal.html
e.g.:
“For buyers, the BEST situation to submit a low-ball offer is when:
1. Seller has reduced the price for 3rd time
2. Seller reduced price two times within 4 weeks
3. Property has been on the market for at least 4 months
4. You show up to OH and apartment is empty with no names on sign in sheet
5. You find out that seller bought 5+ years ago
6. Imperfections are cosmetic NOT permanent
Some examples would include:
131 W 28th Street - Reduced from $995K to $800K; Reduced twice in last 4 weeks. On market since 6/1/2006.
100 W 72nd Street - Reduced from $925K to $799K; Reduced twice in last 3 weeks. On market since 4/19/2006.
444 East 84th Street - Reduced from $750K to $659K; Reduced twice in last 3 weeks. On market since 8/17/2006
100 West 39th Street - Reduced from $749K to $699K; Reduced three times since on market in first 4 1/2 weeks.”
My tactic would be to let the target think you’re interested in making a full price offer, contingent on having your inspector come in, have your guy come in and make a laundry list of every little thing he can that’s wrong, then present that list with your lowball offer. Might work to discourage the sellers from thinking they can get any more than you’re offering. But the offer has to be not ridiculous. This assumes you really want the place. Maybe going back to 2002 or 2001 pricing if you can get a nasty enough list together.
I have to say - that’s pretty low. Do you perchance sell used cars?
A couple attempted to do that when we sold our last house, and we called them on it. We were pissed, because it’s misleading, to the point of being fraudulent - e.g. you can’t just “make up” things to put on a laundry list. Fortunately we were selling before the market was taking, and our call of their bluff worked and they still bought from us.
Personally I believe in honesty - just tell the person you don’t think the home’s worth what they’re asking, to you at least; and here’s what you’re willing to pay. If they scoff at you - just walk away. If they’re really willing to sell at that price, or near it, they’ll negotiate.
taking = tanking
I don’t see how that’s much different than marking some shitbox up 20% from last year’s price and copping an attitude if anyone dares to offer less.
Absolutely. I think you just made my point. It’s not different - in terms of “acinine factor”, i.e. both are acinine things to do.
However there is one difference in that at least someone who asks 20% more than last year’s price isn’t being deceiptful. Stupid yes, but deceiptful no.
‘asinine’ (related to “ass”, not “acid”)
“…because it’s misleading, to the point of being fraudulent - e.g. you can’t just “make up” things to put on a laundry list.”
i didn’t see txchick indicate she would make stuff up. her tactic would certainly piss them off but if they’re treating their home as an investment, then they should treat this transaction as business. emotion/door IMO.
A buyer can’t make fraudulent claims about a property - only the seller. Sheesh.
Buyers can say what they damn well please about any property, and they can offer any price they want. The seller can take it or leave it. Period.
You have a choice between buying new and buying used. If you are buying used what is stopping you from reporting every flaw in the place you are buying? If you were buying new you’d get to make a list of all the things that aren’t perfect - a punch list. Why not here? I see this as hardball, not fraud. Granted if you make stuff up (all windows will explode the first time a door is slammed and need to be replaced for $143,298) the seller will know and (rightfully) ignore you. But listing every cracked window, broken tile, non-current code plumbing issue, etc. - nope not seeing a problem with that.
Right on, txchick. This is the only way you are going to “steal” a bank REO. They hire local listing agents, who sell the bank their services based listing at market prices. The bank REO manager knows he needs to sell these puppies quickly, but he has to justify the low-ball offers on his reports. The only way you can
get the attention of the listing agent to even present the offer, is to go in full price with the inspection contingicy.
That’s where the real negotiation begins. During the RTC era, listing agents were actually spelling out in the MLS that no inspection contingency would be accepted. Those house stayed on the books to the point, where the listing agent lost the listing. Gee, I’m sorry the seller got “pissed off” at this negotiation, but when my hard earned money is on the line, I am here to win within the law.
Yep. You can tell which of us were screwing around with this stuff during the bad old days. Documentation will always work in your favor.
Tchick;….Your advise from a buyers perspective is right on the money…..That is precisely why I demand that any seller I represent get all the reports on the property “Prior To” putting the property on the market….I also require the buyer and buyers broker to review the reports “Prior To” making any offer…It severely curtails “secondary” negotiations of the price due to unknown conditions in the property….
I really was opining more from the perspective of someone who’s trying to buy a foreclosure or REO and knowing what you have to do to get your deal accepted. It could also work with a very motivated seller with equity.
If you want a lower price for a property ,any way your can justify it to the seller helps . Come in with a list of recent comps/listings and a list of the costs to repair or update property etc . Also currently I would come in with articles on predictions of depreciation for areas from any respectable source .
In any event if you want the very bottom prices sometimes you have to wait until the market gets there .
I’d go one step further and search the public records to find work done without permits.
100 W 72nd Street — sigh. My grandparents lived at 15 West 72nd St. Excellent location. I wonder how many BRs the place has?
“BE REALISTIC w/ the low-ball. Don’t bid 30% below ask and expect it to work. Think about why 10% or 15% below ask may be accepted. Remember you are removing any future negotiating from the equation so this is the only bid your willing to make!”
I question the “you are removing any future negotiating” thought. If this market is, or becomes as bad as it appears it might (should) you won’t be “insulting” someone when you make an offer because you may be the ONLY person they hear from in months who MADE an offer. If you want a bargain and you don’t want to expose yourself to TOO MUCH possible loss, you HAVE TO make a bid some 30% below asking. In a market that has escalated as much as 100% in just 5 years, with the potential to decline 50%, you are taking a huge risk. Get paid for it. If someone doesn’t want your price, fine. Its obvious someone else just might.
.g.:
“For buyers, the BEST situation to submit a low-ball offer is when:
When they’re falling this fast now, imagine how fast they’ll be falling when the flood of ARM resets really hits in 2007 and 2008!
A “lowball” offer now is the dream price of 2007.
Shifting Sands and Signals:
http://www.xanga.com/home.aspx?user=russwinter&nextdate=10%2f20%2f2006+23%3a59%3a59.999
Regarding Casey Serin,
At the end of the day, Casey is again contributing to Kindleberger’s description of the housing bubble.
After contributing to the ‘manic’ phase by buying all those homes with little cash and a lot of leverage, Casey is now contributing to the ‘revulsion’ phase where fraud and malfeasance are exposed. He is exposing the dark side of mania and all its supporting cast members: the Get Rich Scheemers, the Appraisers, the Speculators (himself) , and the Bankgsters.
It seems like he’s doing a much better job with the ‘revulsion’ phase; scandal sells, after all. The more people he reaches the better b/c the masses will soon revolt which will lead to the ‘panic’ phase and irrational selling.
Kara Homes Struggles
Kara Homes, a sure candidate for a Chapter 7 conversion, appears to have briefly dodged the bullet with $1 million in emergency funding, the “bare mimimum” required to survive until the end of the month. See:
http://tinyurl.com/wmgrv
Holy shit! Medical Capital Group???? LOL!!!!!!!!!!! What’s that, a bunch of plastic surgeons??? Where’s GE Capital when you need them? If they won’t get involved, this thing is a goner.
Bye-bye deposits. Hello Chapter 7 and things get a lot rougher!
I laughed at that too. You know you’ve got troubled RE when the investors are doctors.
and this
At yesterday’s hearing, Bruck said 24 closings, representing $2.4 million, are “ready to go.”
Man, if I were one of those, we’d be negotiating right now for a much lower sale price. Also, and I’m almost getting tired of beating this one . . . “Zudi.” Is there an American left in this country?
More on “Zudi” from the Jersey shore RE blog…Kara’s employees sound off:
Zudi is a very good salesman but he is a horrible manager and an even worse judge of character. The company started with close friends and people with real estate experience but they were not the most trust worthy of people. He found out he was being ripped off by his own employees but didn’t really care because houses were selling faster than he could open communities. He decided to bring in the family from Detroit to cover his ass, but none of them knew a single thing about real estate and therefore couldn’t do anything to help watch costs. In fact, they were the biggest reason why things went down hill.
Even when the numbers told him he would lose money-he was so arrogant that his answer was that he knows all and he’ll just raise prices to make it work because he was Zudi-king of all real estate!! What a joke-he is so delusional that he actually told people that Trump couldn’t hold a candle to him and that Kara would be bigger than Microsoft in 18 months. Couckoo!! Couckoo! Can you say straight jacket! And then the bottom fell out with the arrival of the Karajozi Hillbillies- Uncle Hector, Aunt Judy, and Miss Hathaway (AKA Grandma Dynamite). For some reason Zudi put them in charge and together their 210 years on earth they wouldn’t know the difference between a buyer and a seller.
The stories go on and on…complete with Lesbian sexual harassment courtesy of “Grandma Dynamite”.
Ben has a link to this blog; these posts are under the October 15 header.
You know what . . . I think this is the first time I’ve seen the word “lesbian” on this blog. Cool. I have a whole list of other words I hope to see before this market bottoms.
Oh don’t be so harsh. WOuldn’t you take these guys money? I mean, they have “excellent working relationships with a number of top notch lenders”.
Medical Capital Group was started by the former DVI Director of Portfolio Management, Mr. Robert M Bauersmith in 2004 to provide equipment financing and leasing to the outpatient Imaging, Radiation Therapy and Surgery market.
Through his many years in the leasing business he developed excellent working relationships with a number of top notch lenders. Today he uses these relationships to bring his clients financing and leasing packages tailored to their specific needs. Whether your needs are “small ticket” (we can do leases as small as $5K) or a major project or acquisition involving millions, you receive the same personalized, confidential service. Our quotes are all one rental in advance, no smoke and mirrors, no hidden charges or fees.
I’m not saying I wouldn’t take it. What I’m saying is this is not your usual post-petition lender for a homebuilder. If the debtor had to resort to this type of lender, that means the better ones looked at the deal and said “no thanks.”
I worked on the General Homes bankruptcy in the 1989 - 1991 time period and I don’t recall seeing “Medical Capital” or whatever it is on the creditor matrix. LOL
What I’m saying is this is not your usual post-petition lender for a homebuilder.
note to self: be more obvious with my sarcasm.
If the debtor had to resort to this type of lender, that means the better ones looked at the deal and said “no thanks.”
Couldn’t agree more. And for the bozos that just wrote them a check, good luck …
I know you were being sarcastic but other readers of this exchange might not.
And as to the lenders who wrote them the check, I’m sure the terms are pretty awful and they do get a priority claim if a plan ever gets done. Still, I wouldn’t have done this.
Note to self: Be more cognizant of other’s recognition of my sarcasm.
Txchick57
Was Arthur Andersen Houston office involved in the workout of the General Homes bankruptcy?
I don’t remember. Probably they were involved for someone.
MDs are the worst investors, period.
I agree, with lawyers a close runner up for second place.
Treas. Sec Paulsen Unloads His Condo at a Nice profit
According to CNBC he bought for 2.8M in 1998 and sold for 8M+. I am assuming that the condo was in Manhattan.
Jas Jain
Likely bought by someone who needs a favor worth more a lot more than 8 million.
CAT, a causalty of Housing Bubble burst.
it won’t spread to the rest of the economy”
right
Things are taking an interesting turn here in the San Fernando Valley. The listing below just posted to the MLS tonight. Boy, shades of 1993.
$779,000 for a 4+2.5 in Calabasas- here’s some exerpts from the listing…
FACING FORCLOSURE. OWNER NEEDS PROPERTY TO SELL QUICKLY…SALE IS SUBJECT TO LENDER APPROVAL OF SHORT PAY
The present owner just bought the house about a year ago… for $840,000!!! YIKES!
Panicked seller! Wait ’til this flavor of selling gains momentum. It’s coming…sooner than most think.
A coworker’s wife is currently doing two short sales in Oceanside. One is a property that sold for $940,000 about 15 months ago. Current short sale price is $770,000. (Note: might have dropped for the weekend.) Its a divorce, she got the house so he ended payments…
I really wonder how many of these toxic loans will cause divorces.
Neil
–
When this sale is done there will be cool 100K for realt-whores and other parasites. Yes, a Free Ride System for finacial fraudsters of all manners beginning with the Bankrupters and Fraudsters of NYC. There are born-and-bred parasites and they are spreading until the hosts — the working stiffs and stiffettes — will be hollowed out, financially, that is.
Jas Jain
Yep. Use to be business as usual all over the Valley in 93′. Repos and short sales abounded.
While I’ve been hearing a lot of commercials from builders on the radio in Boise offering gimmicks like free payments, I heard a first this morning: Price reductions! A sub a few miled from me is cutting prices 24k-48k, which is a giant haircut for around here.
last night I sold my S&P 500 index fund shares and bought shares in an international equity fund that deals mostly with china and japan. I think things in this country are going to get really ugly really fast.
If the U.S. economy falls apart, Asian countries with export-based economies are not going to be in great shape either.
it’s a good thing that China’s economy is not at all connected to the U.S. economy.
ah, sm_landlord beat me to it. my post was sarcastic of course.
Doesn’t vice do well in a recession?
–
Very Bad Idea.
So, you got out of one Mutual Fraud and into another? From frying pan into the fire??
China will go thru a depression just like the US and its Scams would be down far more than the US Scams. Three countries to avoid, in order, are:
India
China
US
The first two are the biggest hypes over the past few years.
Scam Lovers, aka stock bulls, are more stupid than those who bought condos during the past two years.
Jas Jain
Yeah, Jas, but there’s always a bid to hit.
And you don’t need to bake any cupcakes.
–
Even Maria, Money Honey on CNBC, figured out, “management runs companies for management and not shareholders.” Scam Lovers don’t have the brains that Money Honey does.
Also, Maria offered her cupcakes to Cramer. He was well fed at all times. Now, he is feeding his hedge fund buddies by talking their books.
What a Scams!
Jas Jain
She had to marry it though.
One way to play China/India growth w/o exposing oneself to their scams is via Aust/NZ govt bonds. These countries export raw materials to China/India but have more transparent financial institutions internally.
–
Oops, during the Greater Depression the resource economies would fare worse.
Chile, a huge copper producer for the US, during 1930s suffered greatly.
Jas Jain
Debt affects Iraq and Afghanistan wars:
Debt keeps troops from duty abroad
Thousands lose clearance because poor finances seen as potential security risk
Thousands of U.S. troops are being barred from overseas duty because they are so deep in debt they are considered security risks, according to an Associated Press review of military records.
The number of troops held back has climbed dramatically in the last few years. And though they appear to represent a very small percentage of all U.S. military personnel, the increase is occurring when the armed forces are stretched thin.
They don’t say anything about mortgage or HELOC but how many want to bet that not insignificant number of debt problems are due to real estate? Bubble sure is contained, all local phenomenon. Yep. No need to worry about oversea wars….
Aren’t bad debts covered by the Geneva Convention???
Name, rank, serial number, credit report???
Well most military people move around frequently enough that buying doesn’t make much sense in a normal market. But in the last few bubble years it has. Of course now that the music’s stopped….
I’m not shocked- the Military looks at financial history when doing clearance checks likes the number of 30, 60, 90 days etc. I suppose someone in financial trouble is more succeptable to spying for money.
Holy Pig!
Then US military draws from the poorest segment of the society, both financially and intellectually.
During the Greater Depression, more than half the military personnel will be “security risk” due to debt.
I think that it is safe to declare the end of the American Empire. The greatest evildoers, as far as Americans are concerned, are the Debt Pushers, supported by the Federal Reserve System. They WILL cause the collapse of the American system.
A parasite doesn’t care that he is hollowing out the host.
Jas Jain
Sbsun.com is down but one of the biz article today [Oct 20] on their paper:
Warehouse going up in San Bernardino [inland empire], CA: North side structure has no planned user yet.
What in the world? Commercial spec building boom is still going on? This is 254,500 sq ft building is to be completed early next year but no one has signed up yet — get this: they want to sell or lease! Some bubble takes a long time to pop, let alone deflate….
Danny;….A lot of this is going on throughout the central valley….The “Scuttle Butt” is that, the big distribution Cos. want dead storage space within truck commuting distance of the 2 California major metro’s…They started doing this in Nevada many years ago but was just to costly due to distance and weather…The space is not as expensive as it may appear (Big is not necessarily expensive)….
In case anyone missed this story in yesterday’s WSJ, here is a link and a few quotes:
More Home Loans Go Sour
Though New Data Show Rising Delinquencies,
Lenders Continue to Loosen Mortgage Standards
“A separate report released yesterday by the federal Office of the Comptroller of the Currency found that lenders continued to ease credit standards over the past year.”
“The latest news comes amid increasing concerns that lenders have been loosening their standards in an effort to boost loan volume as refinancings and home purchases wane.”
“More than one-third of the lenders relaxed their standards for home-equity loans in the 12 months ended this March, according to bank examiners, while less than 5% tightened their standards.”
Yikes!
So in other words, they need new loans to cover the growing number of bad loans while reporting profit on performing loans.
Sounds like a classic ponzi scheme.
Is this just another dishonest attempt to delay the inevitable post election?
The ’stupid money’ expansion stalled at the end of 2005; now the reallyreally ’stupid money’ expansion is stalling too. Who whadda thunk it? They ‘dun use up all the fools. Game over. Prepare for the ‘financial genius’ fall.
Thanks for sharing this. I found this quote very interesting…
The Comptroller’s report found that competitive pressures are driving many banks to further loosen their credit standards.i>
Oh that’s great news! Seems the foreclosure trend is going to be a drawn out foregone conclusion. We could be in this trend for 3-4 years easily. This type of nonscense is sure to exacerbate the problems.
This is why deregulation is a bad thing. We need regulation!!! Is that the ultimate lesson of the financial industry’s bad behavior? I certainly think so.
Moscow’s Real Estate: Bull Market or Fart Bubble
“In a short yet explosive article, Vedomosti revealed that the number of properties for sale on Moscow’s real estate market has more than doubled, from 12,000 to 25,000. And the average time a property spends on the market before finding a buyer also doubled. In January, it took about 3 weeks on average. In September, that period rose to up to 2 months. This may be small by Western standards, but the trend is clear, and it echoes trends in other parts of the world where real estate and other assets, which have had enormous run-ups, are starting to peak.”
http://tinyurl.com/y3ahej
In Soviet Russia, your home loan amortizes bank.
Check out the asking prices. Wow. A lot of room for movement when larger units are listed for less than smaller units.
http://tinyurl.com/yftdcq
Good post. Like getting an extra bedroom and bath for “free”. Now that’s a true incentive. Enough with the cars ,vacations upgrades and various crap. Give us more space and a better HOUSE for the money.
why FB sellers will chase the market all the way down…
————
Critical Thinking: Part Skill, Part Mindset
And Totally Up to You
WSJ October 20, 2006; Page B1
….
Critical thinking means being able to evaluate evidence, to tell fact from opinion, to see holes in an argument, to tell whether cause and effect has been established and to spot illogic. “Most research shows you can teach these skills,” notes cognitive psychologist D. Alan Bensley of Frostburg State University, Maryland. “But critical-thinking skills are different from critical-thinking dispositions, or a willingness to deploy those skills.”
….
As he puts it, “critical-thinking skills have to do with the cognitive ability of reasoning. Critical-thinking dispositions are more related to traits that determine whether you choose to use those skills.”
In other words, critical-thinking skills are necessary for engaging in critical thinking, but they are not sufficient. You also have to want to think critically. If you have good critical-thinking skills but for some reason are not motivated to deploy them, you will reach conclusions and make decisions no more rationally than someone without those skills.
As Lady Tichborne showed, people aren’t inclined to deploy critical-thinking skills if those skills lead to a conclusion that clashes with deeply held beliefs or hopes – in her case, that her son was alive.
in other words, a lot of smart people are screwed because the $ is buying up their critical-thinking dispositions.
I believe galbraith said something like
“speculation buys up intelligence”
The more emotion that attends any decision they higher the probability of an “oversight” that leads to failure or disaster.
The Real Estate industry has fed at the trough of greed and envy for 30 years. “Stretch to buy-up” (overconsume), “You don’t OWN?” (envy) and “RE ALWAYS goes up” have been their mantras.
Well, now we’ll see how they deal with the opposite emotions;
FEAR, risk AVERSION and complacency.
Florida Question?????????????????
I’ve enjoyed reading the posts here! I am extremely nervous though! My husband is taking a new job that would require us to move from Charlotte, NC to Naples, Florida. There is a chance we could move to Sarasota(it seems more centrally located). We’re still finalizing details. He is so excited and it is a wonderful opportunity for him. I just need help deciding whether to buy or rent. We have two school age daughters and would rather settle them into a permanent home than rent for a year or two. Looking online the homes seem way overpriced. From this website, I’ve read lots of negative comments about the homes being overvalued and a bust in the area. If we were to purchase, what is a fair price? 25% off asking, 30%, 50%….. I wonder what a good price per square foot would be? Are we better off building to get a good deal?
I’ve read numerous comments about insurance. Is it impossible to get? Does anyone know any insurance companies that are writing new policies so I can get a qoute to see what it would cost us? What about the taxes? Do I contact the county tax appraiser to find out what the taxes would be on the purchase price? The Mls isn’t listing taxes online. Is anyone familiar with Naples or Sarasota? Is this area okay to raise children? Do you know any good family neighborhoods(it seems that there would be lots of communities with retirees) with good schools? A local realtor has contacted us and sent some relo info, but I’d rather save the commissions and do it myself. With the internet, it doesn’t seem that it would be too difficult. We’ve relocated before, but never so far away and during a real estate bust! Any advice would be greatly appreciated!
Check out Tom Doyle, a Naples realtor and really good guy. He is very realistic about that market which most others are not. We’ve quoted his stuff many times on this blog.
http://www.thenaplesinsider.com
I don’t know him personally and won’t benefit from this recommendation, I was just impressed with his knowledge of the market and honesty.
Good luck. Naples is a nice place. I actually tried to buy something there early in the year and was summarily dismissed by the seller, who, btw, still has not sold.
sorry, here’s the link
http://www.naplesinsider.com/
Nobody here is going to advise you to buy. I’m sure you can rent. It’s a low-risk strategy. Good luck.
Thank you! I checked out his site. I will contact him regarding rentals, unless he can show me a nice house around $200 a square foot.
The Pain of Selling Your House
Why owners often remove their homes from the market even if they’d make a windfall.
http://www.latimes.com/news/opinion/la-oe-schwartz20oct20,0,1715594.story?coll=la-opinion-center
Fascinating and very true. Unfortunately, this is going to cost people more than they realize.
Thanks that’s a GREAT article.
“Is $279 a lot of money to spend on an automatic bread maker? When Williams-Sonoma first marketed these then-novel gadgets more than 20 years ago, no shopper knew what a bread maker ought to cost, and Williams-Sonoma didn’t sell a lot of them. Then it introduced a deluxe, $450 model. The company didn’t sell many of these either, but sales of the $279 model went through the roof. The deluxe bread maker made the regular one seem like a bargain. Conclusion: We are affected by anchors whether it’s rational or not, whether we want to be or not.”
Northern Virginia realtors forecast the future!!
http://www.sungazette.net/articles/2006/10/19/arlington/real_estate/aareal984b.txt
Dave Eaton, managing broker Prudential Carruthers Fairfax: “I think things will be dynamite in the spring market. The naysayers who are saying no, that’s nonsense. There will be a little slowdown over the holidays, but by the middle of January, look out. In six months things will be in great shape.”
Dawn Jones, Weichert McLean: “There will not be any great slide in prices.” Why: the “area’s heavy governmental presence and high-paying jobs…and there are many people in this area with deep-lined pockets.”
Caroline Rocco, Coldwell Banker: “The market will be poised and brisk and ready to take off again come the springtime.”
Jane Price, Weichert McLean: “the current market correction and attendant slower sales momentum will lift next spring.”
Lilian Jorgenson, Long & Foster McLean: “the Christmas season might give some buyers the extra emotional push to take the plunge.”
But it gets better! Up through this summer, you couldn’t find one realtor who forecasted a correction. In fact, they denied the possibility of a correction ever happening by asserting there was no such thing as a housing bubble, ‘because all markets are local’ (I still don’t get that logic). Now these realtors are claiming that they knew a correction was coming all along (this seriously makes me sick to my stomach). Here is what they had to say:
http://www.sungazette.net/articles/2006/10/19/arlington/real_estate/aareal984f.txt
Mark Beardsley, Long & Foster: “Every day between 2003 and 2004, Realtors were prefacing their comments about the market, saying this can’t go on. ”
Mark Middendorf, Weichert, Realtors: “It was expected, and we knew it was imminent, though I don’t know if anyone knew exactly when it was going to happen. With the market escalating over the last six to seven years, every year Realtors raised the question whether the market was going to level off.”
Grant Doe, Long & Foster: “Realtors that have been in this business a while were definitely prepared, and it didn’t surprise anyone, because they expected it. Frankly, I think the lowest prices you’re going to see are right now.”
Deanne Brock, Brock Realty: “The Realtor community generally saw it coming and were adjusting for it as it was happening.”
Dave Eaton, managing broker Prudential Carruthers Fairfax: “I think things will be dynamite in the spring market. The naysayers who are saying no, that’s nonsense. There will be a little slowdown over the holidays, but by the middle of January, look out. In six months things will be in great shape.”
He’s obviously not in step with the market dynamics. Gary Watts said this 2006 is going to be an “inverted” year, so there will be a tremendous amount of homes selling through the rest of Q4. By January the inventory situation is going to be extremely tight with bidding wars and squrrel feeding back in full force. Cdmpetition among will be particularly intense in Florida, Las Vegas, Phoenix, San Diego, San Joaquin Valley, Boston, DC/NoVA and Idaho. Buy now or be priced out forever 9this time for real).
“…competition among buyers will be particularly intense in…..” (sorry)
Its simply a matter of perspective. Logically, if you’ve become long accustomed to something appearing in “X” perspective your mind isn’t going to shift overnight. In fact, the more emotional content there is (for you) towards “X” the HARDER it will be to shift that perspective (significantly) either positively or negatively.
Think of it in terms of “first impressions” we get of people. They are often accurate but sometimes we learn, over time, we were mistaken. But it takes time, more information and more “mulling” of the new perspective. We “anchor” things in our mind for the simple reason we’d be blithering idiots if multiple, important, thoughts were constantly influx. Its unavoidable (unless you ARE insane).
All that being said, the question remains; what DOES it take to shift an “anchor” in our minds on a person or subject? Again, the more emotion involved, the more “violent” something has to be to disrupt that, deeply ingrained image……maybe, in the case of asset prices it takes a HUGE decline for the price point we’ve imagined to shift negatively.
If so, I suppose the only outcome of this bubble (and can it be credibly be argued to the contrary?) is for there to be a pretty bad decline. It is the history of all bubbles and, unfortunately, it appears this process conforms to our immutable human natures.
Nice article on FSO / Realty Reality, Ben!!!
Debt-Addicted Gamblers
and the Federal Reserve
Could this be Seattle Eric?
Just askin’ . . .
http://seattle.craigslist.org/sno/cas/223177214.html
“Recessions serve to purge an economy of mal-investments. And to the extent that occurs, a deflationary recession in housing is a good thing.”
I totally agree Ben.
This seems so wrong. Italics for the quote, bold for the messed up bits, and hopefully neither left on for posts that come after.
http://sfbay.craigslist.org/eby/rfs/223289396.html
This is a bank owned Bungalow style home. It has 2 bedrooms 1 bath and features a wood burning fireplace and hardwood floors. 1038 Square feet. 100% Financing Available!
It seems like dumping bank owned properties using 100% financing gimmicks can only ricochet badly, assuming it moves at all.
I’ve got a situation: I’ve been living in a Berkeley rent-controlled apt for many many years. Owned by family, the original owners have died, and the heirs (of which I am one) want to sell it. It’s a unique set of buildings that appraised for 385k back in 2000ish, and the family thinks it’s worth about $1m as a TIC, and maybe $800k as an ‘income’ property.
The down side for me is that I’d have to move if the property is going to get max dough as a TIC, since I live on one of the ‘nicer’ apts. This building was built in the ‘teens and is funky Berkeley rental property: Knob&tube wiring, 30amp service for the whole apt., 90 years of renters.
I don’t want to leave. The realbozos are trying to come up with a way to make this work(me buy as TIC AT THE TOP(ish) OF THE MARKET or move out), and I think they’re a little hungry. What’s a good buyout number? I have no idea where to even begin.
Here’s a seller who hasn’t heard that the ride is over.
http://orangecounty.craigslist.org/rfs/223607916.html
Listed (FSBO) for $850,000, Zillow’s for $681,432, bought 7/30/03 for $390,000. Nope - no greed here. Wish I was close enough to go to the open house to offer a little (kind) education.
Obviously, there is confusion in the land. When I was looking at it a short time ago,the top book on the “Movers and Shakers” book list on Amazon is “Investing in Real Estate, 5th Edition”. The second book was “Screwed: The Undeclared War Against the Middle Class”. It’s changed since, but right now “Investing in RE” is still #1.
http://www.amazon.com/gp/movers-and-shakers/books/ref=pd_ms_b_nav/102-9068705-1916134