“The Buyer Today Is Going To Wait For Pricing To Soften”
The Naples News reports from Florida. “The deadline for closing on properties purchased in an Oct. 21 auction has been moved back to Dec. 6. Auction operator Paul Drake said he wasn’t aware that one of the properties for which he’d announced a high-bid price is now in foreclosure.”
“In legal ads printed in the Daily News, Washington Mutual Bank announced foreclosure on 1121 10th Ave. N., although the ads refer to it as Lot 22, Resubdivision of Block A, Lake Forest. The owner of record, Marjorie Dresner, had numerous properties listed in Drake’s auction.”
“Shortly after the event, Drake said that property at 1121 10th Ave. N. drew a contract price of $341,000. Public records show that Dresner bought the house in May 2005 for $585,000, with an April 26, 2005, loan from Washington Mutual. Mortgage documents show Dresner took out a loan worth $468,000 plus interest.”
“That is part of the problem, real estate professionals protested, before and after Drake’s advertised auction. It was unrealistic, because many of the top bid prices were far less than the mortgage prices, they said.”
“While Drake had denied financial hardship was involved for people who had put their properties up for auction, real estate analysts noted that a few days before the auction, Dresner had taken out a second mortgage on most of her participating properties.”
“News of the auction ignited debate about Naples’ real estate market, and whether sales prices were dropping drastically.”
“Naples Area Board of Realtors President Jo Carter has said her members didn’t object to the idea of an auction, only that the true property values weren’t reflected in the opening price. Drake and Manning listed starting prices at $1.”
The Sun Sentinel. “Buy an Orchid Grove townhouse in Pompano Beach, and send your kid to college on Coscan Homes’s dime. The tuition incentive is one of the more unusual carrots dangled by desperate builders, who continue to be hammered by rising buyer cancellations and declines in new orders since South Florida’s five-year housing boom ended this year.”
“Builders would rather offer incentives because lowering home prices can get them into trouble with existing customers and affect future appraisals, said Ray Puzzitiello, president of Puzzitiello Builders in West Palm Beach.”
“‘If you’ve got a guy who closed on his home a couple of months ago, and he finds out that somebody else paid $10,000 less than him, and he will because they all talk, then he’s going to be upset,’ Puzzitiello said.”
“‘It’s been a very quiet market for many, many months,’ said Al Piazza, CEO of privately held Coscan.”
“‘Are these builders in trouble? Yeah,’ said Anthony Trella, a Deerfield Beach-based home building consultant. Many builders own too much land, he said. In some cases, they’re simply walking away from deposits, figuring it’s cheaper to let go of it now and buy it back later, Trella said.”
From TC Palm. “‘For Sale’ signs sit on front yards everywhere but aren’t as effective as professionals who can offer aggressive pricing information to get buyers in the door, said Will Rosselle, a broker at Rosselle Real Estate Group in Port St. Lucie.”
“The number of homes for sale has tripled, even quadrupled, since last year, according to Rosselle.”
“John Reichard, owner of Southwind Construction and Homes in West Palm Beach, builds new homes from Boynton Beach to Port St. Lucie. To move the properties, he has increased broker commissions and tried making upgrades such as granite countertops and paver driveways standard. Still, he said, he’s seeing home prices in general fall somewhere between 12 percent and 18 percent.”
“‘The profits are less, but as long as you make a profit, you can’t go broke,’ Reichard said.”
“‘There are a lot of amazing deals out there right now. But a lot of people need to sell their house to take advantage of that,’ Rosselle said. To do that, sellers need to look back to prices from two to three years ago, he said.”
The News & Observer from North Carolina. “Sales of existing homes declined for the first time in almost four years last month and the number of houses on the market rose, as one of the Triangle’s leading economic engines continued to sputter.”
“Meanwhile, the inventory of homes for sale grew by 6.6 percent, and the number of sellers cutting their listing prices jumped 17 percent. Hundreds of homeowners have sliced prices to sell their homes. In October, 37 percent of all listings, 3,973 homes, had price reductions, according to the Triangle MLS.”
“Brokers blame the slowdown on competition from home builders offering incentives to move new homes, the inability of transplants to sell their old addresses and potential buyers attempting to wait out further price cuts on resales.”
“‘We’re going though a market adjustment, no question about that,’ said Bernard Helm, a market consultant who tracks Triangle residential trends. ‘The buyer today is going to wait for the pricing to soften.’”
“Shields Pittman, a broker in Raleigh, said, ‘If … [buyers] aren’t in a rush, they’ve got nothing to lose.’”
‘It was unrealistic, because many of the top bid prices were far less than the mortgage prices, they said. Naples Area Board of Realtors President Jo Carter has said her members didn’t object to the idea of an auction, only that the true property values weren’t reflected in the opening price.’
Does Carter think a better offer is down the road? How are ‘true values’ measured by the amount of the mortgage?
Here are a couple of letters to the editor:
‘I have absolutely no sympathy for the Robertses and all the other investors and speculators who are in danger of losing it all. The investors and speculators have essentially created this boom. These investors and speculators have ruined the American dream for millions of ordinary people just like me. They have artificially driven up the price of all housing: apartments, rental homes, condos and single-family homes. Investors buying homes at the tail end of the boom in order to flip them have only themselves to blame! As for me, I will continue to enjoy living in my wonderful inexpensive apartment reading about the poor fools.’
‘ While I do have empathy for Jodi Roberts, who suddenly knows ‘what it feels like to be poor,’ I feel the situation she finds herself in is because of investors such as her and her husband. Our local real estate market did not accelerate in value because Mr. & Mrs. Jones with two kids moved from Ohio into a new house in Tampa. The market became inflated because of investors, small and large, looking to make a quick buck. If the Robertses had not been blinded with the $310,000 they made last year, perhaps they would not find themselves in the overextended situation they are in today. I welcome this inevitable transition of our home values finally getting back to where they belong.’
What unrealistic? Not the price. Probably the idea that Dresner will show up at closing with a cashiers check for $240k, the only way that this sale could proceed. Really what happens in a case like this? If it doesn’t go to foreclosure, I assume the process stops before everyone’s sitting around a table staring at the (I wish I was a) seller saying “where’s the check?”
‘Collier County records show Dresner took out an Oct. 9 balloon mortgage for $500,000, and list most of the Dresner properties that were included in Drake’s auction.’
Not only that, someone loaned Dresner half a million bucks, almost certainly after the auction was already scheduled!
What was the bank thinking? There’s no way she accurately portrayed her finances when she took out the loan.
Due diligence, anyone?
I was at the auction. It did not start with the auctioner asking for a $1. bid as Jo Carter implies. He would start at a high level and then the failure to get bids resulted in lower offers and an auction. Naples is imnsanely over priced and the locals are starting to get it.
The real comedy in all this is that the only people who want to jump all over these “deals” are stuck in overpriced houses they can’t get rid of. People who sat out the whole party, like most of us, feel no sense of urgency at all.
It really is a house of mirrors for house sellers and builders.
I get the same feeling. Last year, whenever the conversation turned to housing, I was on the defensive. Now, people ask me for advice and insight.
What a difference a year can make.
I envy you. My relatives are still deep in denial. This Thanksgiving the subject will come up and it will be Neil vs. the extended family.
But it amazing how an obscene amount of food complimented with a well aged wine makes one not care!
I get one day off my low-carb high veggie diet. 
:) 
Neil
I had the ultimate vindication today. My mother-in-law told me, to my face, that I was right about “everything.” When I asked her which everything, she mentioned housing and W.
hahaha
Did she watch Oprah yesterday?
I’m on vacation this week, but my wife “owns” the TV during Oprah and Dr. Phil. Anyway - I’m looking on this blog and some others, and I hear the Oprah program begin talking about some desperate sellers trying to unload their property. So Oprah brings in a design expert and a landscape specialist and not counting anyone’s time, they spend a little less than $10K making the place more attractive. I think the asking was $619K for a townhouse in either Manhattan or Hermosa Beach? (I didn’t take notes) And the end result was…. nothing! More visitors, oohs and aahs, but no formal offers. Hardly anyone cares right now about anything but price, and the asking price was simply too high.
Anecdotal, yet it suggests the sheep are waking up.
Congratulations, GS!!!
OTOH, I’m **still** waiting for my MIL to do the same. (sigh)
The merry-go-round is spinning too fast for anyone to get on. Only those already on it can change their mounts.
Great analogy.
Indeed, the builders may be offering deals as they see it, but they are getting stuck with huge inventories because their potential customers are stuck in their old house and can’t find a buyer to save their life. With cancellation rates soaring, the builders’ problems will only grow worse. They are still building like mad men in the east bay area, and I would be very interested to learn just how many of these units are actually sold and have a solid buyer behind the contract.
Please, when will the practice of rolling huge incentives into appraisals be called out by the press. Lying is lying.
A consultant in Las Vegas said ‘appraisers know’ about incentives and take them into account, but that’s the only time I’ve heard that.
Ben , I don’t believe incentives are taken into account . Now we have the builders paying for college ,but they don’t want to anger the prior buyers in the tract . A used home seller could not say that they will give a big incentive cash back/car etc., but they are going to keep the appraisal high because they don’t want to anger their neighbors . Besides, the developers have their ’special lenders’ with their special appraisers that no doubt consider that these incentives just have marketing value with no effect on the appraisal .
Housing Wizard, I think you’ve hit on something. I think the next bubble-bust will come from the world of higher education. Some fast, nimble competitors will come along (I’m betting on totally online, world-class colleges based in India or Singapore) and blow the over-priced, over-staffed American institutions away with its lower tuition and higher-quality instruction.
Incentives of the non-cash or cash equivalent kind simply mean that the buyer is buying more, not spending less.
So why wouldn’t the appraiser break that out for the comps? There won’t be a BMW in every garage.
If the appraiser brings down the comp the buyers have to put more money down to the loan and these builders are trying to get people in at the lowest amount of down payment possible . The builder wants to give the incentives without the loan amount given by the lender being lowered because of the incentives,( because alot of the buyers now want 100% financing or low down financing .)
Let me rephrase that. Any incentives that convey when the house is resold (carpeting, appliances, a swimming pool) mean that bhe buyer is buying more, not spending less.
I don’t totally but into this notion that builders are unwilling to lower the buy price because they are afraid of previous buyers; ultimately they are more afraid of local tax collectors and local government in general, thinking how they will obtain their next permit.
What ever happened to old folks moving down to Florida and living in trailer parks in the winter, then heading back up north to Michigan and Ontario in the summer? I had an aunt who did that. It was a nice trailer, too. Sarasota used to be packed with them. Is there an unwritten AARP law that states older folks are now required to buy an overpriced condo?
Lots of trailer parks in Florida were bought up durining the boom and replaced by condos & townhouses.
None of these vultures felt anything for the old folks they pushed out on the street. I remember reading quite a few stories about people who couldn’t afford to move their trailers while all this was happening.
40% haircut ,not to mention the autioneers take
=wow !
FL barely budged from 1990 to 95
My mom’s house in Venice went up a little every year in the last bust
There’s no way WaMu agreed to a short sale, so this auction is null and void. What’s silly is this flipper now not only faces foreclosure, IRS problems, and bankruptcy, she could also be looking at criminal charges on the refi loan docs, and lawsuits by the auctioneer and the auction buyer.
She should have just mailed the keys back and walked away.
Dresner’s actions only appear logical if you presume she was attempting to run a scam.
grubs ™
“not to mention the auctioneers take”
If the auction cut is big, it suggests the auction price may be a high-end estimate of where market values are headed…
Lou may be on to something. Trailers, on the N.C. coast, are a great deal, and the carrying costs are low. They are taxed on land only, and why bother to insure? Investors can even get good cap rate on rentals. Sing the Roger Miller song.
Most of NC houses and land are still a great deal. 3,000 sqft tract built new houses ~175K in charlotte NC and SC is a shade cheaper, and this is 15 miles from the city with a pretty easy commute. We never participated in the boom, more than likely will miss the bust as well. I hope we do.
Cool.
Cow_tipping.
Cow_tipping is right. $175K will buy a pretty nice home in places like Charlotte, Greensboro, Raleigh, or Greenville, SC.
Are there alot of cows around to tip in that neck of the woods .
In my realtors office yesterday, she received a fax about FL townhome offered by Lennar that did have an $80k price cut + $20k in upgrades and closing costs. This was on a $380,000 townhouse in Delray Beach.
She mentioned she thought pricing was coming down to 2003/04 levels but at a few listings we looked at they were priced still at the peak. Those listings had been active for 364 days.
my realtor”? dude, buy direct
look at mls for the soon to expire
I also received an email from Centex the other day, offering “A One Day Sale”. Townhouses in Abacoa (Jupiter) that were originally $429,000 for under $325,000.
Now as soon a Centex sells those townhouses for $100k plus under what people paid there goes all the comps. When these investors go to refi out of there interest only or option ARMs that will not be able to becasue their loan to value will exceed 100% and probalby be at 140%. This is going to casue foreclosures to rise and prices to drop further.
No wonder builders have to worry about angry prior buyers in their speculator/flipper / unqualified buyer ridden tracts . The builders made their bed as well as the prior buyers ,but builders have come up with the answer ,just give kickbacks the new buyers .Yes , your point is well taken about how this will cause foreclosures from some up-side-down prior buyers and this is the very reason the builders are trying to have their cake and eat it to .
The really scary thing is the 99.9% of the public is unaware of the “cobroke” deals out there. I have seen one that was offering a $200,000 vig. Imagine the FB finding out his good ‘realtor” pocketed $200k on top of the normal split, and he now owns the POS.
The point here is that these people could not afford a home, also. In fact, only 5%-7% (if I remember right) of the people walking around California can afford a home.
And stop this nonsense about these people are investors. These people are not investors. These people are the idiots who “played” investors. These are idiots who bought the bling watches and bling glasses, stood in a lottery line — with a freakin bluetooth sticking out of ther ear –, in some trailer in the middle of a cow patch for an “opportunity” to buy an overvalued house for 800K with a “LIAR” loan. I know some investors; and my friend these people are no investors.
A great description of all these “investors” we have seen recently. I might grant them the title of speculators, but investors? No way. They were just playing the Greater Fool game. This line was classic, and so true. Don’t you know? The central valley is going to become the next “place to be.” And what is it with those bluetooth things, they look so retarded.
“with a freakin bluetooth sticking out of ther ear –, in some trailer in the middle of a cow patch”
Bluetooth = brain cancer delivery system.
What you the “next place to be”? We’re it right now! Well, according Pacific Builders there it right now. They claim they have an upscale neighborhood in Atwater, complete with a “real” life size train that runs 10ft. from you backyard. Yes, no toy trains here, a real train.
Yep, I just got throttled for 65k to sell my place. I’m renting for at least 1-2 yrs and any seller that wants me to bit on their house is going to have to makes concessions of the same or greater magnitude to hedge my position so I am not upsidedown the moment I move it. Shoe is now on the other foot and now its my turn. I’ve learned not to be mister nice guy or to be “reasonable” when it comes to something. The developer hosed me by selling me a home that could not be resold at the price I paid so never again.
More details please. Names, places, dates, and so on. I read your ‘promissory estoppel’ argument but was unable to respond. I am sure everyone wants to know what happened and it should be cathartic for you. Release your anger and don’t be afraid to spew the builders, bankers, and realtwhores; they deserve it.
Were there any witnesses to the transaction when that developer held the gun to your head and forced you to buy his house?
Please, give the poor guy a break. He got suckered and is wiser for it now. And he’s here, which is a good thing. I save my snark for the arrogant folks.
Thank you. I just submitted a similar sentiment. Kind Regards & Happy Holidays.
No, but I think you miss the point due to your assumption/perspective/bias that I am a whiny non-responsible person. I participate in this forum to pass on the wealth of my experiences & mistakes to others. Please refrain from flippant, unprofessional conduct. Remember what goes around, comes around and if the shoe was on the other foot I’m sure you would not appreciate such commentary.
I am taking personal responsibility for believing the developer’s/real estate agents’ (Seller & Buyer) lies about the future development of the plan.
Lesson learned, “anything stated orally that will impact upon the re-sale value of the home becomes a contingency for delivery written into the contract.” Of course such a contingency would be refused and thus it tells you they do not want to be bound, but be open to make such deicisons upon prevailing market conditions. You will hear alot more about people getting stuck w/undeveloped plans/parcels/lots where town squares, golf courses etc were asserted to go which will lessen the value/desirability of their lot.
You’re hypo of duress would be a defense to formation of the contract so any one put under such conditions be advised you do have a defense.
Good points. In some of these developments the developers promised many features along with a certain homeowners fee because they were going to build x amount of homes . If the builder doesn’t complete the features of the tract or doesn’t build all the homes ,the homeowners fees will be higher and you won’t get the features you thought you were going to get .I’m sure most builders have small print disclaimers in case they don’t build all the features /homes .
This is another reson why sometimes builders complete a project in spite of the market being bad .
How about all those people that bought into those condo conversions and than the builder/owner decided to rent out the remaining units they couldn’t sell . Now your in a Homeowners Association where the builder/owner is part of the homeowners and has a majority vote and your not living in a owner-occupied project anymore but a apartment rental complex with some owners .Would have a huge effect on re-selling and the buyers didn’t expect the project would be changed to a half and half deal .
Joe -
I wouldn’t worry about it. I agree with previous poster - it’s great that you’re here sharing your experience. Details and names are always great too! I suspect we will start seeing more and more whiny biatches showing up here(please pardon my french), and that the negative comment a few posts back might be more relevant to them. We do get the occasional REIC cheerleader here, and they mostly deserve the venom unleashed upon them, IMHO.
Methinks you just got caught in the earlier posters crossfire. You’ll find most here very reasonable, even sympathetic. Hell, if my FICO wasn’t a few points too low because I couldn’t/didn’t pay my gym membership on time while I was out at sea, I might have been in the same position as you.
It’s the folks that don’t even know they’re farked yet that provide the REAL entertainment around here!
Buyers waiting for prices to soften - isn’t that the definition of soft landing. Like I have said a 50-70% price drop in this “soft landing” “is in the bag”.
Now I’d like to see this mythical buyer - cos everyone with a pulse bought already. So I guess dead people need to get out of their grave, stop the decomposition and buy buy buy. Who cares, they can flip them next month, make 20-40% and then go back into their old place and continue decomposing.
Cool.
Cow_tipping.
“everyone with a pulse bought already.”
I only wish that were true. There are still plenty of people in coastal Northern California all too eager to sign on the dotted line for their perceived “good deal” of 5-10% lower prices.
As Robert Cote likes to remind us, these falling knife catchers are not our enemies –they are our best friends. Without them, there would be nobody buying depreciating houses (all the way down) and setting the lower comps. Remember: no transactions = no comps.
I appreciate the knife-catchers’ invaluable contribution in providing transaction data that proves house prices are indeed falling. I just don’t want to be one of them
.
“Eventually, slower construction activity, general price declines and stabilizing mortgage rates will help the South Florida housing market rebound. Coscan’s Piazza said he expects the incentives to disappear next year as sales begin to pick up.”
No wonder he’s not carving prices. He is stuffed and seasoned with high expectations. This turkey is going to roast.
“Buy an Orchid Grove townhouse in Pompano Beach, and send your kid to college on Coscan Homes’s dime.”
A little bit of back-of-the-envelope math:
Say your kid is 8, and that the college education is about $60K (state school).
Say it’s a $300K house. If the builder instead dropped the price to $240K, that’s about $300/month savings on a 30-year fixed 6.5% P+I note. If you invested that $300/month in a 529 at ~8% until your kid is 18, that amounts to $55k, which sounds like break-even. However, you had been saving that $300 a month for only 10 years. You still have 20 years left of saving $300/month. If you keep investing that at 8% for 20 years, by the end of the mortgage you will have ~$175K in the bank!
This is really approximate, and I didn’t take taxes into account (sorry, I’m not a finance person, I used the bankrate 401K calculator.) But even the roughest math shows me that these incentives are a crock. I wonder what those agents at Coscan Homes would say if I put that math in front of them.
Oxide,
It is WORSE than that. The Florida Pre-pay LOCKS IN the future cost for a lump sum, or equal monthly payments, so the benefit is much less.
Assume that the child is a newborn. For about $12,000 you can lock in a 4 year state college tuition now. That means when that child wants to go to college 18 years from now, regardless of the cost, it has been paid for. So the real cost is not $60,000, it is $12,000. If you did the monthly payments it would be more, maybe $16,000 or so, but still far less than $60,000.
PLUS, don’t forget that you are FINANCING that $12,000 and paying interest on it through the mortgage. You are not “getting’ anything for free. It is costing you money. Let’s not go into the fact that the true calue of these townhomes may be some 30-50% less than the current price, which is slightly more than $12,000 ( chuckle).
Talk about a pure marketing gimmick.
Wait, so you can sent your kid to college fo $3K a year, as long as you come up with the money now? Florida must really be hurting for cash up front.
It’s amazing how powerful a weapon a little information is. I should go to Coscan and ask them why they are charging ~60K for something that costs $12K. I’ll put a portable defribrillator in my tote bag just in case.
Oxide,
Florida has had the pre paid program for over a decade,as do many states.
Here is the link: http://www.florida529plans.com/Main/sidebyside.html
I also forgot to mention that the cost is directly related to the age of the child, so IMHO the cost can vary greatly . If the child is 17, then yes, the cost will be higher becuase of the immediate need. But in the case of younger kids they do a future value of the net present value to determine the cost.
All that I know is that I spent about $10,000 each for my kids to purchase the 4 year plan some years ago.
10 grand a year? Methinks that the world of higher education is cruisin’ for a price correction bruisin’!
No,
10 grand total per each kid for the 4 year program. A total of $20,000 for both kids.
Isn’t it obvious that this college pre-pay is just an off-the-books way for the state to borrow money? Yet another unfunded future entitlement.
Now how in the hell is this builder going to give a “college incentive kickback”? Are they going to put cash in a bank account and say don’t touch it until your kids go to college ?The marketing of homes has become a circus to try to get people in the tent ,but never decrease prices like you should to sell a home .Keep those prices up so when the market turns in 2007 you won’t have problems with comps if you want to get rid of the incentives .
I live in Naples Fl and things are pretty dead around here.
I was in Office Max, Home Depot and Lowes last night and white many people go back up north for Thanksgiving, this area seems to be lacking in the normal density. No Doubt! The stores were empty.
I’ve sold window treatments to plenty of flippers during the last 5 years and could tell that something was up last year.
This is only the second time that I’ve been caught up on the manufacturing end of my (housing related) small business in 9 years of manufacturing and both times were this fall already.
The owner of the paint shop that I used to use sold his business and then put his house up for sale….
Looks like he made a mistake in selling his business before his house.
There is alot of newcomer businesses that leveraged their way into business and putting advertising costs on plastic while pushing prices into the gutter.
I do look forward to a cleansing of the business marketplace.
Too bad we won’t really need any more houses built now for awhile..
I guess that housing slows down and then business slows down and then alot of people get re-re-established heheh
easy come easy go
I don’t get it…how could she (Dressner) take out a second mortgage on most of the properties that were up for auction in 2 days? Was that her last trip to the property ATM machine before her house of cards fell down?
Obviously, any auction not involving properties owned by financial institutions is probably nothing more than a fraud.
I can’t see how the bank would allow a short sale like that to happen. Dressner may think she is getting away with something but will come to a hard reality when the true owner (the bank) says the aution price is no good.
Buying at an auction doesn’t erase any “clouds” to the title. The noteholder still has a lien for the amount of the mortgage, plus any past due interest, attorney fees, etc. Title cannot transfer without a clear title.
If seller gives a Quit Claim deed as opposed to a warranty deed he/she can transfer title subject to outstanding claims. Granted this is more than likely a technical default under the existing mortgage but that does not preclude a seller from taking such action. The seller would be on the hook to the creditor if it is recourse financing regardless of the deed transfer, however; if it is non-recourse the seller has exited the transaction.
The buyer under such a circumstance could not be sued by the original creditor for a deficiency, however; the creditor still has the right to foreclose the RE collateral to recover its loan. The buyer, in this instance, loses the real estate it bought from seller to the bank and is out whatever money it paid to the seller. Furthermore, the buyer has no writes to pursue the seller for its loss as the seller accepted a quit claim deed, which is essentially an “As-Is” transaction = Buyer Beware.
To mitigate this liability/contingency a potential buyer typically obtains a title commitment or date down of the title policy to see what claims exist. Upon discovery of such claims the buyer typically requests an adjustment to the purchase price. I am assuming the buyer did its proper due diligence prior to the auction to validate the state of title prior to purchase. The fact that an additional mortgage was added two days prior to the auction may have gone unnoticed by potential buyers unless they were getting title updated frequently = every day and the County recording office was up to date with its record keeping.
It should be “rights” not “writes” in the 2nd paragraph
The following sentence:
Furthermore, the buyer has no writes to pursue the seller for its loss as the seller accepted a quit claim deed, which is essentially an “As-Is” transaction = Buyer Beware.
Should have read:
urthermore, the buyer has no writes to pursue the seller for its loss as the buyer accepted a quit claim deed, which is essentially an “As-Is” transaction = Buyer Beware.
“And, along North Palm Beach County and the Treasure Coast, Sforza predicts that a ricochet will start next spring, as hurricanes retreat in memory and Scripps and its biotech affiliates move closer to reality.”
Buy now! Come next Spring, no one will remember Katrina. Moreover, insurance and taxes will drop. In addition, everyone will win the power ball and baldies will grow hair and the Nasdaq will return to its peak and… and…
I didn’t know that the Scripps Institute near Palm Beach was definitely a for sure thing as of yet. I know that they have been struggling with environmental concerns about their proposed building site.
It don’t matter no ways.
Scripps Institute will not “save the day”. The salaries that they will pay a couple hundred researchers are modest and will not support the housing prices in Palm Beach…..nor will Scripps “turn the market around” so that some of these greedy wishing specuvestor asshats can finally retire from a single real estate transaction.
They have been talking about “Scripps turning things around” in Palm Beach for the last 6-8 years……..Big Whoop.
They were even considering building the site up at Yeehaw Junction, where an entire city is planned to be built up from the old orange groves that they are destroying.
Scripps ain’t gonna bail anybody out of their misery in Palm Beach.
What specific concerns? I would be interested in hearing about that.
Environmental impact concerns on sensitive property.
The local tree huggers found a plant, frog or something on the proposed site just west of Jupiter and that has held things up.
Scripps has been looking at other sites as a result. Temporarily, they have taken over some labs at Florida Atlantic University in Boca Raton. They are already about 25% staffed at the temporary location and that hasn’t made any impact on the local economy…..I doubt the new facility will either.
I am a scientist by trade and have watched this thing develop from a distance here in Polk County, FL.
Those Scripps jobs will number a paltry 3-4 hundred; and the most of Primary Investigators will make around 90-110K tops. So at the top of the Scripps food chain you will have a few 100K people and the many lab tech servants under them at around 45-50K.
Not enough to turn the sinking Palm Beach real estate ship around.
And, just like anything else nowadays, when they “incubate” any “high-tech” at the yet-to-be determined site, they will just offshore all the practical aspects of it ( manufacturing, ect ) to Asia or India.
Also, don’t forget, Scripps is a not-for-profit.
You mean to tell me there actually a place in America called “yeehaw junction???!?!?!11!?” And of course it has to be in Florida….
Yep, Yeehaw Junction is a stop on the Florida Turnpike, roughly halfway between South Florida and Orlando. There’s a gas station, a tourist info. center/trap building and a whole bunch of empty fields. Unless you have to stop to fill up your tank, grab a Slim Jim or something, there’s no reason to stop, much less live there.
There has never been any houses there to live in anyways. It’s nothing more than an off-ramp on the turnpike to Hyw 60 with “Billy Bob’s”, the tacky tourist trap.
Everytime I read about Destiny, or whatever that planned community is named, I just laugh. There is NOTHING out there and it is an hour to get anywhere. The closest community is Okeechobee about 30 miles south, which has the distinction of being the poorest town in the USA that also happens to have the highest concentration of AIDS.
It’s sad that construction and real estate activities are a “leading economic engine” for so many places in this country. We’ll find out where that’s going to lead us, and real soon too. Kunstler has written that the American economy, aside from the financial sector, consists of simply creating oil-dependent sprawl.
I’m going to be in Naples for a wedding in a few months, so I’ll have a chance to see what’s happening there for myself.
Correction - “WERE a leading economic engine….”
It’s like a Mob of Greater Fools playing a high stakes Poker game with Foreclosure & Financial Ruin as the “Winning” Pot. It seems as if a lot of Potential Buyers are Finally realizing this. I have money, I really don’t NEED an over-priced McMansion for my Ego and I NEVER GAMBLE because the one way or another, the Game is FIXED against the Losers !
I agree this is a huge poker game.
Sellers have a fortune in the pot. They’ve borrowed an immense sum. Yet somehow the think selling a seat with cards that show 2 pair is worth 50% of the pot! Sorry, the guy who has the straight flush already sold his seat for 80% of the pot’s value. Bummer the buyer didn’t consider taxes…
And the flippers keep going all in.
Dang!
Mortgage fraud.
Auction fraud.
Did you see the “Fake Grouper” investigation in Tampa Bay Area restaurants?
Food fraud.
A fraudsters paradise.
A sunny place for shady people!
I always remember Boca Raton. I spent a week there a couple of years ago with my poor FB friend down there. There was a lawyer, stockbroker, “financial planner,” “wealth specialist” or funeral home on every street corner! It was amazing. It seems like the whole place just exists to fleece the elderly.
Txchick, you hit the nail right on the head. The prevalence of so many shady folks in Florida has PREVENTED a lot of elderly folks from retiring there. My parents included. They’re still living it up in the empty nest where they raised me. Only way they’re leaving that place is feet first.
What am I missing here? The woman auctioned her house for $341k, but owed at least $468k for it?
The closing will never happen… unless someone brings the difference to the closing table. Who’s going to do that? Certainly not the buyer.
Is that why the Realtors were so upset with the auctions? Because they not only exposed the true value of the houses, but that it was done in a manner that didn’t even produce a real sale?
The reporter did a bad job of explaining this story. They should have told us how in the world the buyer is going to take ownership of a property for $341k, when the property is basically owned by the bank with a selling price of $468k.
If I’m the bank I take the 341k and cut my losses. Its only a 30% loss compared to sitting on the POS. Then go after the seller to recover what money you can get.
There’s a good chance that these were secured with 80/20 owner/occupier mortgages. If so, why would the bank with the 20 EVER agree to a short sale, when they’re looking at 100% loss versus an undischargable (fraud) defficiency judgement. And with some big multiple flipper you want to be first in line. Their only chance is to get theirs before a bankrupy judge starts prioritizing claims.
Housing Foreclosures spike in October
Up 42% over a year ago; Colorado, Nevada and Georgia lead.
By Les Christie, CNNMoney.com staff writer
November 17 2006: 9:12 AM EST
http://money.cnn.com/2006/11/17/real_estate/october_foreclosures_up_again/index.htm?postversion=2006111709
RealtyTrac, an online marketplace for foreclosure properties, reports that 115,568 properties entered into some stage of foreclosure in October, a 42 percent increase over last year and an incidence of one for every 1,001 U.S. households.
The comparison with October of 2005 was particularly dramatic because that month in 2005 recorded the highest foreclosure rate last year, according to James Saccacio, chief executive officer of RealtyTrac.
A short sale is one way to do it. But if the bank has already foreclosed, then a closing based on the auction transaction will not happen. The successful bidder can try to buy it from the bank for that price, and the bank may be willing to sell it. We bought our foreclosed property for less than the outstanding mortgage balances. It happens all the time.
If you see a foreclosed house that you like, make the bank a VERY aggressive offer. If your offer has no contingencies and you can close quickly, they may accept it.
Yeah, I know all about short sales, but it sounds like the bank didn’t even know about the auction, or that she was interested in doing a short sale.
Sounds more like they rolled the dice and thought the house would get bid higher than the balance on the mortgage.
The fact that she took out the 2n’d mortgages only days before the auction, indicates that she wasn’t planning on doing a short sale.
Yeah, I know all about short sales, but it sounds like the bank didn’t even know about the auction, or that she was interested in doing a short sale.
Sounds more like they rolled the dice and thought the house would get bid higher than the balance on the mortgage.
The fact that she took out the 2n’d mortgages only days before the auction, indicates that she wasn’t planning on doing a short sale. Further, the fact that she was able to get a 2nd mortgage on the property, indicates that the mortgage market is still full of fluff.
I suppose some of the qualities you need to become a realtor, besides leasing a new car and having a fixed smile, is to talk fast, keep tap dancing on the spot and, above all, HOPE nobody has a tape recorder to play back your words which can be thrown back in your face.
Take realtor Will Rossette in Port St. Lucie, for instance. He said, “There are a lot of amazing deals out there right now but a lot of people have to sell their own houses to take advantage of that……” Okay, Mr, Rossette, let’s look at that statement first. In essence, realtor Will Rossette is saying that the only people who can afford to buy are those who have equity. (That’s the commodity which is fast diminishing for those who bought in the last few years.) So, according to Mr. Rossette, the majority of people who are able to buy property at these ridiculous prices, are those who bought years and years ago. If that ISN’T the case, then these vacant properties would be flying off the shelf as first time buyers snapped them up. And that ain’t happening.
Statement #2 from realtor Will Rossette which follows up statement #1. “There are some amazing deals out there right now but sellers need to look back at prices from two or three years ago.” So, in statement #1, he tells us there are “some amazing deals out there”. Then, in statement #2, he tells us, “Sellers need to look back at prices from two or three years ago.” Well, that sounds as if those “amazing deals” might not be so amazing if someone buys one of those current “amazing deals out there” and finds, several months later, he could have bought for thousands of dollars less as prices revert to two or three years ago.
These realtors really DO deserve the name realtorwhores. If this mess eventually turns out to be as bad as I think it will be and government (too late as usual) brings in new rules to control these booms and busts, hopefully, some of the new laws will hold the brokers and realtors financially responsible. Unfortunately, if new rules are passed, they will probably be for the protection of the banks not the citizens.
Actually, Mike,
That is a great schpeil. He never really says who it’s a great deal for, the Buyer or the Seller. You assume the buyer, but he doesn’t really say that. It’s a good sales pitch.
I had an associate who, when asked, if the buyers were “happy” with their new purchase, he would reply, “they’re as happy as a clam”. Now, I don’t know how happy a clam is, and it really doesn’t give a definitive answer, but let’s the asker of the question determine just how “happy” that is.
One of the phrases that they used to use when I was in the business, when asked, “How’s the real estate business?”.
Reply: “It’s UNBELIEVABLE !” You could take the answer anyway you choose, but even if business was bad, it was unbelievably bad.
I put this post on the very end of a thread a few days ago; my apologies to those that already saw it.
I announced a couple of weeks ago that there was a large auction (62 properties) here in Vero Beach scheduled for 11/18. I was unable to attend, but the local paper - The Press Journal - (otherwise known as the mullet wrapper) stated in Sunday’s paper that the auction was a success as properties were being sold. However, the article also said that an exact count of properties sold was not available, which naturally made me suspicious. Anwyway, below is one response out of many that was sent to the paper regarding its article:
“I was distressed to read the article on the Real Estate Auction yesterday. If the reporter had actually been at the auction then she should have been able to report the facts. Per my notes, there were 6 properties that actually sold at the auction, 15 properties that had bids that are subject to the owner’s approval, 38 properties passed on because the bid was not within 25% of the suggested asking price, 1 property withdrawn, and 2 “Buy It Now” properties. The 15 properties that are subject to owners approval will be negotiated between the buyer and seller just as any traditional offer to purchase would be. I also belive that sellers may be mislead by the article and believe that auction is the only way to sell a property in todays market. With the quick change in the real estate market, correct pricing from the start would help facilitate a quicker sale in the real estate market using traditional Realtors.”
“‘We’re going though a market adjustment, no question about that,’ said Bernard Helm, a market consultant who tracks Triangle residential trends. ‘The buyer today is going to wait for the pricing to soften.’”
Ben,
Have you noticed that every day recently, you are posting articles from daily papers around the USA which report that buyers are waiting for prices to soften? Aren’t you worried that someone at The Board might be reading here, and point out to Big Ben that deflationary pressures are mounting in the housing market? I personally am very concerned about the moral hazard problem of near-term incentives for the Fed to reflate — targeting, smargeting…
They are claiming that buyers are waiting. Those buyers just have to be out there, even though we can’t see them. Don’t they?
For a little light reading over the long weekend, enjoy the latest chapter in the on-going saga of Silicon Valley RE at:
“The Last 30 Days (Nov’06 edition)”
http://www.viewfromsiliconvalley.com/id281.html
Thanks!
One of the phrases that they used to use when I was in the business, when asked, “How’s the real estate business?”.
Reply: “It’s UNBELIEVABLE !”
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I’ve learned to be leary of this word since it’s used extensively by the con artists and shucksters of the world.