“Frenzied Flippers” Walk Away In Florida
The Naples Daily News reports from Florida. “Frenzied flippers have walked away from contracts to purchase homes as the real estate market has slowed across Florida. In their dust, they’ve left behind cash. Rather than keep the cash, Taylor Woodrow is offering other buyers the opportunity to use forfeited deposits toward the purchase of a new home at a few of its communities.”
“‘They will be able to buy a home that already has the deposit in place,’ said Tim Diers, director of sales and marketing for Taylor Woodrow’s Southwest Division.”
“While some might see it as just a marketing gimmick, the company says it’s a way to increase buying power.”
“By using the forfeited deposits toward purchases, the company can keep its recorded home prices higher. ‘We want to keep the valuations of the communities up and the neighborhoods up,’ Diers said. A few other builders in Florida have offered similar programs, including G.L. Homes, based in Sunrise.”
“Under the program, most buyers still have to put down their own deposits, depending on how financing is structured, Diers said.”
“Ross McIntosh, a Naples-based real estate broker, said marketing a home that another buyer has walked away from can be tough. Other buyers are left with the impression that the home isn’t worth its selling price. ‘It’s nice to have the deposit,’ he said. ‘But it’s not nice to have the deposit and be stuck with the unit.’”
“‘For a lot of people that are looking at this market from a long-term standpoint, now is actually a good time to buy,’ Diers said. ‘If you’re looking to buy a property to flip, certainly I don’t think anybody looks at the ability to do that in this marketplace.’”
“One by one, some of the nation’s largest home-builders have seen quarterly earnings get crushed by the slump in the housing market. Miami-based Lennar Corp. became the latest victim Tuesday.”
“‘These are difficult times for the home-building industry,’ CEO Stuart Miller said. ‘The reality is that market conditions are still challenging at best and in some markets continuing to deteriorate.’”
“Orders fell 34 percent in Lennar’s east segment, which includes Florida, Maryland, New Jersey and Virginia. Among the slowest markets were southwest Florida and the area north of Palm Beach County, the company said.”
From Reuters. “Gabriellee Cunningham had fallen behind on the mortgage on her modest suburban Miami home and was mired in debt when she was approached in June by a door-to-door ‘mortgage lender’ who promised to help her.”
“Nine months later, her $89,000 mortgage has ballooned into a $234,000 loan, her monthly payments have doubled and she faces foreclosure on a house she no longer owns.”
“‘I know I did something stupid but I am going to fight these people ’til my last breath because they are trying to rob me,’ said Cunningham.”
“Florida is among the states hardest hit by the crisis, which some advocates believe is in its infancy. Florida ranks second to California in the percentage of subprime loans, many of whom are finding they can’t make their payments.”
“By some estimates, up to 30 percent of loans in Miami are subprime.” “Jeffrey Hearne, a lawyer with Legal Services of Greater Miami, said his office saw few cases until two years ago but now has two dozen and sees one or two new ones each week. ‘We are having to turn them away,’ he said.”
“Cunningham says her mortgage, an $89,000 loan at 8.5 percent when she bought the home in 2000, is now a $234,000 loan at 11 percent. Monthly payments have gone from $1,038 to $2,275. And her name is no longer on the title. ‘How do you think I’m going to pay $2,275 if I fell behind at $1,038?’ she said. ‘I’m afraid I don’t even own my home anymore.’”
The Palm Beach Post. “Foreclosures spiked in the state and around the region in February, according to a study released Monday that confirmed fears the housing boom’s speculation and easy credit would lead to a hangover.”
“In Florida, 19,144 homes entered foreclosure in February, the most of any state, said RealtyTrac.”
“In Palm Beach County, 1,317 homes went into foreclosure, nearly double January’s 680 foreclosures and well above the 765 foreclosures in February 2006. The 228 foreclosures in St. Lucie County were triple the February 2006 number.”
“‘It’s no secret that Florida had a disproportionate number of speculators buying homes they never intended to use,’ said Brad Hunter of Metrostudy Corp. in West Palm Beach. ‘We’ve known for some time now that those people were going to lose their homes.’”
“‘Prices are going to come down,’ said Jack McCabe, a Deerfield Beach-based housing consultant. ‘It’s the period that I call ‘catch a falling knife.’”
From TC Palm. “Ron Rennick will conduct an auction Thursday at the Vero Beach Museum of Art, with properties ranging from condominium units at the Vista Plantation complex to large million-dollar waterfront estate homes.”
“‘Some people are very motivated to sell their homes, but obviously it’s difficult in a slow market,’ Rennick said. ‘The properties all have different owners…and buyers will be able to find some good prices.’”
“Jack McCabe said auctions are being used more frequently because the normal sale and marketing aren’t working. ‘I think we’re going to see a lot more of foreclosures, a lot more homes taken back by the banks and a lot more homes being auctioned on the steps of court houses,’ McCabe said.”
The Tampa Tribune. “After decades of rampant enrollment growth and a frantic race to build schools, Hillsborough County expects a halt in 2007-08.”
“‘If I had to be a betting person, I see no indication that the economy would turn,’ said Jim Hamilton, Hillsborough schools’ chief officer for district compliance. ‘Housing prices would have to come back to reality, and rentals that tried to convert to condos would have to convert back to work force housing.’”
The Bradenton Herald. “Coast Financial Holdings Inc. has been hit with another class action lawsuit seeking a jury trial.”
“The suit filed Monday in Tampa federal court alleges that directors and officers of the holding company and its Bradenton-based Coast Bank withheld information from shareholders that wound up cutting their stock value in half.”
“It names as plaintiff Troy Ratcliff as an individual and on behalf of others with similar potential claims. Ratcliff’s suit maintains that Coast Financial partnered with St. Petersburg-based Construction Compliance Inc. in order to ‘take advantage of the housing boom and in particular the fast-growing real estate market in Southwest Florida.’”
“‘The plan was simple: Borrowers would put little money down and take out construction loans in their name that CCI would then use to construct the properties,’ the suit states. ‘CCI would then use the credit line to construct the properties and pay the interest on the loans. Once the construction was completed, borrowers would then sell the property or ‘flip’ it for a quick profit.’”
“‘Furthermore, the company should have fully disclosed the risks associated with this line of business - there were little, if any, controls placed on CCI and its ability to withdraw money from Coast Financial,’ Ratcliff’s suit states. ‘Ultimately, CCI withdrew tens of millions of dollars, never completed construction on many homes and left Coast Financial holding the bag.’”
Frenzied Flippers…
Sounds like an early 60’s dance craze?
Frenzied flippers please report to the dance floor.
Holy Snikes! This thread is already in GOOGLE! I was searching for “Jack McCabe” and this thread came up.
“‘Prices are going to come down,’ said Jack McCabe, a Deerfield Beach-based housing consultant. ‘It’s the period that I call ‘catch a falling knife.’”
Hey everyone, did this guy copy our term or what. He sure wasn’t using it last year when we were.
Say…
“Flippers” date from the late 20’s, Reaaal Late 20’s?
Say no More
Oh crap…
I’d like to buy a vowel. Is there an “A”?
whoops… Flappers
My bad.
I think you mean “flappers”. But, maybe not.
How many flippers in this group?
http://biz.yahoo.com/ap/070328/circuit_city_layoffs.html?.v=2
so are they laying off $10 an hour employees and replacing with $7 dollar an hour employees???? Is that what they are trying to say?
Maybe. It wouldn’t be acting like many public companies, but they could be taking a longer view.
“‘We are taking a number of aggressive actions to improve our cost and expense structure, which will better position us for improved and sustainable returns in today’s marketplace,’ Philip J. Schoonover, Circuit City’s chief executive, said in a statement.”
And “the future” marketplace?
Preparing for a recession? They may not replace all those employees.
From death_spiral’s link:
Circuit City Stores Inc. said Wednesday it plans to cut costs by laying off about 3,400 store workers and hiring lower-paid employees to replace them, and by trimming about 130 corporate jobs.
This is a brutal way of cutting salaries. Layoff and then hire new. Wait a second… I thought laid off employes had first dibs on a job? Why don’t they just say “FIRED.” For in effect, they were.
But that isn’t the main point. The main point is that retailers can and will lower salaries to match the market. This says that they are not having trouble aquiring employees. Hence, I smell a disconnect between official unemployment figures and the reality on the street. Think about this a minute.
It means we have already entered the deflationary spiral. We’ll have inflation on imports and deflation of US salaries.
Cest la vie.
My normal snack is put asside. This is… sad. Yes, foreseen. But still sad.
Neil
tell BB it’s NOT SPREADING
that’s what YAHOO says
it’s cool bro
It is a very brutal way to cut costs and it seems to be happening more. I can imagine how much it would suck to be losing your job then have to train someone making 6.40 an hour (FL min wage) to do your old job. Though I can imagine service at Circuit City is going to suffer.
Neil, you’re right. Call CNBC, they need to stop the show right now. If circuit city can hire and fire like that, the employment numbers must be wrong.
the unemployment numbers are an outright lie, along with inflation data and vast amounts of other govt. statistics. For years, each administration has doctored the numbers to get the results they want.
“core inflation”. What a joke. Hedonics, substitution, seasonal adjustments, estimated earnings, inputed incomes and rents. It’s all a scam to keep the real economic reports coming. REAL unemployment, about 12%. (counts discouraged and chronically unemployed).
Real Inflation, about 8%. Add about 5% to the “official” number. No propagandist Media Shills are going to report the truth, but you can SEE IT on the street.
(rant off).
The executive who came up with this plan can expect a 25% pay raise this year.
CA is an “at-will” state and the following applies:
“Employment At Will” (alumnus.caltech.edu/~rbell/atwill.htm)
Ever since the Supreme Court’s decision in Adair v The United States (1908)
(Adair v. United States, 208 U.S. 161 (1908) (USSC+) ‘While the rights of liberty and property guaranteed by the Constitution against deprivation without due process of law, are subject to such reasonable restrictions as the common good or general welfare may require, it is not within the functions of government –at least in the absence of contract — to compel any person in the course of his business, and against his will, either to employ, or be employed by, another. An employer has the same right to prescribe terms on which he will employ one to labor as an employee has to prescribe those on which he will sell his labor, and any legislation which disturbs this equality is an arbitrary and unjustifiable interference with liberty of contract.’)
courts assume that employers hire all employees (other than those explicitly hired for a specific term by contract) at-will; further that the word ‘permanent’ means ‘full-time’ (as opposed to temporary or part-time) rather than eternal.
In ‘The Effect of the Employment-At-Will Rule on Employee Rights to Job Security and Fringe Benefits’, Fordham Urban Law Journal, 1982, Volume X, number 1, pp. 1-71, Joseph DeGiuseppe discusses this issue revealingly. For example:
The overwhelming majority of jurisdictions continue to adhere to the view that employment relationships of an indefinite duration may be terminated at anytime without notice ‘for good cause, for no cause, or even for cause morally wrong’ [Payne v Western & Atl RR, 81 Tenn 507, 519-20 (1884)]
and:
The employment-at-will rule has withstood numerous challenges since its inception. Dismissals have been upheld under the at-will rule where employees have reported kickbacks, refused the sexual advances of their employer, refused to take a psychological stress test, filed workmen’s compensation claims, indicated their availability for jury duty, refused to support political candidates favored by their employers, filed unemployment insurance claims, expressed concern about the safety of the employer’s product, and filed complaints with government regulatory agencies concerning allegedly improper conduct by their employer. [more citations than I care to enter here, but at least one for each.]“
“Circuit City Stores Inc. said Wednesday it plans to cut costs by laying off about 3,400 store workers and hiring lower-paid employees to replace them, and by trimming about 130 corporate jobs.”
Someone should remind them that the Home Depot approach to customer service really doesn’t work so well.
“They will be replaced with employees who will be paid at the current market range, the company said in a news release.” -is the consensus that $7hr employees replacing $10hr employees a good cost cutting measure? If you thought the sales people there sucked before…
That’s the new model…Currently for inflation they use product price,but Mfg’s have reduced product size while charging the same. Thus they don’t use unit price, or throw out food, housing ,blah,blah, blah. $50 for 2 small bags at walmart, but NO inflation….Pffft. Gas will be up to $4 pretty soon at this rate. ..See CircuitCity has full employment.
Maybe it is not my imagination. I remember not too long ago, that when I walked into a Home Depot, I would have ten salespeople within a 10 foot radius all willing and able to help.
Now when I go there I couldn’t find one with an orange smock seeking missle.
Circuit City’s been going down the tubes for years. Best Buy has really been handing it to them. I’ve never been overly impressed with the customer service at either one.
“Gabriellee Cunningham had fallen behind on the mortgage on her modest suburban Miami home and was mired in debt when she was approached in June by a door-to-door ‘mortgage lender’ who promised to help her.”
LOL. You never buy shellfish from the trunk of someone’s car.
these stories are flabbergasting.
We have stories of people signing over the title of their home to a door to door “mortgage lender” (Gabrielle cunningham), there are stories of people signing over their credit to people they don’t know (the CCI story), stories of people buying a home/gettinga mortgage in a Flea Market (in a language they don’t understand no less)
There is no end to the stupidity.
Obviously, many of these stories are cry-me-a-river wannabes who understood the risks and were willing to bet, until the market hit them in the face with a trout.
However, it is clear that many people are truly stupid.
and now we’re all going to pay somehow someway for their stupidity.
The party still goes on in Palm Beach County though, despite the imminent cliff. I think the locals intend to max out their HELOCs and plastic before the credit plug is pulled.
I wish we had statistics on how many of the foreclosures are second homes owned by out-of-state speculators. They get to walk away from their folly and leave us suckers with the mess!
Some of us are hoping to cleanup big time.
Are you a member of the 2012 Vulture Fund too?
exactly what are you going to clean up?
LOL. You guys are too funny.
HIC,
Nice visual with the trout, but why not a stupid bass?
Because TxChick coined the phrase (somewhat inadvertantly)! So I cannot claim that I am original!
A while back on this blog (probably over a year ago) she stated that she wanted to slap these stupid people upside the head with a 20lb trout!
“Cunningham says her mortgage, an $89,000 loan at 8.5 percent when she bought the home in 2000, is now a $234,000 loan at 11 percent. Monthly payments have gone from $1,038 to $2,275. And her name is no longer on the title. ‘How do you think I’m going to pay $2,275 if I fell behind at $1,038?’ she said. ‘I’m afraid I don’t even own my home anymore.’”
You never did own your home. But your not the only sucker. Somebody out there is holding your loan.
What did she do with the $150K+ that she pulled out by refinancing?
EXACTLY!!!!!! ugh! These stories kill me. It was not “FREE” money. It was a LOAN. Yet so many people didn’t see it the way it truely is…not even my own mother. Every year from 01 to 04 she said I should refi and take the equity out for another home or pay bills, etc…..I just couldn’t see the logic of “borrowing” more money!!!
kc, that is a great story idea! Instead of these poor folks, I would like some interviews with the financial analysts who bought the bundle of loans with this women’s loan.
“she was approached in June by a Goldman Sachs ‘mortgage seller’ who promised to help her.”….
Why is she still paying on a house that isn’t in her name? It’s the sucker whose name is on the paper who is on the hook. She should have taken the $150k and found an apartment somewhere.
Her name could be on the note, however.
The roof over my head has been foreclosed upon. The note was for my heinous landlady, but the deed reads some other dude. The house is collateral for the note. The “some other dude” is SOL cause she hasn’t paid since Sept.
paul
Maybe this door to door “mortgage lender” had a lawn mower in the trunk of his car ? you know business within a business. Beer Me !! Rich
Here’s how things work at the Arizona Slim Ranch: Unless I’m expecting a visitor , I don’t answer the door.
Slim you know the old saying “the lights are on but nobody’s home” HA HA !! the guy saw the homeowner open the door and knew he hit pay dirt. Beer Me !!
my door you are greeted by my german shephard-rottweiler mix. she loves door to door salesmen
Mine has a polished brass plaque that says: “Never mind the dog; beware of the owner.”
I like that Slim. I’m going to adopt policy myself.
Door to door mortgage broker, I mean.. what can you say???? next there will be door to door surgeons giving botox shots.. wait it is south florida, they probably already do that…
Your not far off. Don’t know if you were being facitious, but yes, this, as well as debtists in apartments, is something I’ve seen.
Nice Freudian there
Door to door botox
It already happened. Remember the two doctors who injected each other and their wives last year. Turned out it was the wrong kind of botox and all ended up with permanent illness?
tresspassers will be shot. survivors will be shot again.
“‘I know I did something stupid but I am going to fight these people ’til my last breath because they are trying to rob me,’ said Cunningham.”
I call Bull$*#t on this lady. First you never buy anything sold door to door. Second the salesman didn’t hold a gun to her head, kidnap her, or hold her hostage. So she did this of her own free will and accord. I’ll bet she didn’t hire a real estate lawyer to help her if she didn’t understand the contract either.
People are so greedy and stupid and driven by emotion rather than logic and sense.
Taylor Woodrow is offering other buyers the opportunity to use forfeited deposits toward the purchase of a new home at a few of its communities.”
builders contracts are the most one way deal going- wonder how they account for this
debit acc rec credit deposit SNARFED ?
“wonder how they account for this debit acc rec credit deposit SNARFED ?”
excellent point.
Man, I so wanted to short Coast a few months ago, but durn etrade didn’t have the shares to borrow. Oh well.
‘I’m afraid I don’t even own my home anymore.’”
You never did Gabriellee - and never would.
I hope you did something good with the extra $150,000.
You certainly didn’t use it to pay the mortage.
Dave:
I don’t think she got the extra $150,000.
They don’t elucidate in this story (I wish they did), but what may have happened is this:
she was a few months late on her mortgage payment. A conman came to her, and told her he could help. He’s black and ‘christian’, she was ‘black and christian’. so she trusted him.
(this is all in the story)
So he tells her that all she has to do is sign these papers putting the home in his name, and he will get the homeloan up to date, and also pay the loan for 1 year, allowing her to get some breathing room.
(this also in story)
then in 1 year she can get the title back in her name, and resume payments… the conmen usually state that there will be various fees for doing this. The stupid mark believes the conman.
(also in story)
So then, the conman gets the title in his name. Immediately hits the home with tons of fees, and then FRAUDULENTLY re-appraises it and takes out several extra loans on the property.
(this is my guess)
So now the original homedebtor is stuck with a home that has a much higher balance, at a much higher interest rate, and their name isn’t even on the mortgage.
(this is in the story)
If they stop payments, they lose the house. But if they make payments, the house isn’t theirs anyway.
(in the story)
This happened to a friend of friend of friend of mine. She was recently widowed, had small mortgage of like 100k on a 500k home. couldn’t make bills initially. she should have just sold the house and downsiezed, but she had emotional attachments to the house.
So, idiotically, she signed away her home to these equity strippers, who immediately charged like 50k in fees and then took out a 350k HELOC and then were gone. she was left with a house with a new 500k loan balance with someone else’s name on the title who was nowhere to be found.
it’s disgusting.
Wow!
This happened to a friend of friend of friend of mine. She was recently widowed, had small mortgage
“But my friend Barbra, a nail technician, has a new 500 series silver BMW and it’s sooo pretty, and oh her new b**obies, oh I got to have one, er, two of those too! but I’m only a data processor, where will I get the money?”
I should reiterate. The widow in my story didn’t get a dime. The conman took ALL of the money and left her with a mortgage 400k above what she had.
(that said, I don’t have real numbers on this story, I may be off by 100k either way)
The widow was left with no home, no money, no nothing. Just an extra $400k debt on the home.
I know many of you find a sort of shadenfreude in these stories, but I really don’t.
yes, people are stupid. Incredibly stupid. But some of these incredibly stupid people are victims too, and to me the story is PATHETIC, not stupid.
and remember, OUR taxes will be raised to help pay for these stupid people. OUR property values skyrocketed (hence, higher property tax, higher home prices, we were “priced out”) because of these stupid people. And now we will see a huge RE crash due in part to these stupid people.
and likely a bailout of these stupid people.
and even MORE irritating to me, we will see a bailout and lots of taxes for the SMART people who knowingly exploited these stupid people.
so while we laugh at the stupid black christian lady, our govt is engineering a bailout for all the big banks that used their smart financial computer models to exploit the black christian lady’s stupidity (and possible greed)
He’s black and ‘christian’, she was ‘black and christian’. so she trusted him.
[Nelson]HA HA![/Nelson]
She got duped by one of the “Bruthas”….
He may of been Black, but apparently was not a real Christian.
If you learn someone’s faith within 5 minutes of meeting them, grab your wallet and your genitals. You are about to get screwed.
So true. Anyone who does business while wearing their religion on their sleeve is a conman.
You are most likely to get screwed by someone who looks just like you, talks like you, and supposedly shares your interests and beliefs. That’s how the conman gains your trust and gets you to let your defenses down.
Remember conmen come in a shapes sizes ages and races and religions. There have always been conmen and there always will be. We just have to know this fact and then guard against them.
Anyone who does business while wearing their religion on their sleeve is a conman.
Does that also apply to politicians, like, well you know.
Here’s how that goes. The woman had been praying for help with her situation and this guys shows up on her doorstep. Thinking this is an answer to her prayers, she falls for it hook, line and sinker.
Remember the old Bubblefucius sayings:
Be careful what you pray for.
and
He who try to pick (real estate) bottom, end up with stinky finger.
She got conned by a CROOK….race has nothing to do with it….. There aren’t many FB I feel sorry for, but this is one.
I’m trying to feel sorry for her. But he was a freakin’ door-to-door salesman. Did he bring a bible order from her recently deceased husband?
Quite a story, sounds like it couldn’t work without the complicity of the lenders. Guess it’s one more symptom of the mad scramble for yield, on the part of whoever actually lent the money.
Nothing skeevy in the title search process that would give a lender pause, though? Or the title processor?
I hate to see folks like this taken advantage of. Sucks.
It is disgusting, and those of us with brains and retirement potential (I need another 15 years, myself, at least) could volunteer at the DA’s and AG’s offices to help bring these people to justice. As the population ages, this will be a larger and larger problem. I have a father in law - wonderful guy, ex-controller at a good-sized corporation - who is convinced he will win the Publishers Clearing House sweepstakes. He continues to buy small things even though there are disclaimers about buying to increase his chance of winning.
I hope that does not happen to me as I age.
“I hope that does not happen to me as I age.”
I’m a father-in-law a few times over and there’s no chance I would get suckered into such schemes. There are those who hope for something-for-nothing and those who don’t. It always was that way and always will be. When I spent time in the Middle East I learned a very popular axiom: you let go of the currency at the exact moment the rug merchant lets go of the rug.
“They sent a black guy. I’m black,” Cunningham said. “He said he was a Christian. I’m a Christian.”
I wonder if he said he was an idiot…
Sounds like the racist religious freak got what she deserved then.
“…‘Ultimately, CCI withdrew tens of millions of dollars, never completed construction on many homes and left Coast Financial holding the bag.’”
Couldn’t have happened to a nicer group of people, IMO.
Bernanke sez inflation is the primary policy concern
Resource utilization is key inflation risk
yeehaw. Got hard assets and commodities?
“sez inflation is the primary policy concern”
Saber rattling without action tends to have the opposite of its intended effect.
I feel sorry for the guy. He cannot win.
He is the quintessential bagholder.
Kind of pathetic really…
He’s gonna get all of the blame and none of the fame.
And people jump through hoops to be humiliated, still.
Sadly,
I must agree on BB’s state. You cannot push a rope and he cannot do a thing to save the economy. Personally, he should pop the bubble by doing a suprise 0.25% raise in rates. In the long haul, that would be the best medicine. Oh… I know it won’t happen.
Got popcorn?
Neil
Oh,
On that popcorn?
On our southwest roadtrip, we discovered Redmond RealSalt, all natural sea salt, from ancient seas, in Utah.
You’ll never go back to regular salt again.
Yummy!
Paulsen, Sec Treasury, is a complete ass. And, he is a complete stupido.
Few months ago with USD at $1.27 Australian, I posted here my notion that USD would fall to $1.22 AUD by mid-summer. Today, $1.236 and counting. Someone may know a better currency, but I don’t find any opportunity to buy Euro-denominated bonds with a reasonable yield. AUD govts pay close to 6%.
Aussie’s got no water.
Or almost none.
The Swiss franc is a better currency. As for reaching for yield, there is a reason that some currencies pay higher interest. It’s not because they’re trying to help lenders make more money.
Why does the DJIA get less plunge protection than NASDAQ or S&P500? Is there a coordinated plan to end correlation?
http://www.marketwatch.com/tools/marketsummary/
It’s all about the S&P
1425 = 50 dma
was support
now resistance
but you know those charts don’t work
Tx:
I’ve always had this question for you, now seems opportune:
Do you think technical analysis works because of some version of mob psychology, due to some “mystical effect”, or do you think it is starting to become a self-fulfilled prophesy.
By this I mean could it be that it works because everybody reads the charts a certain way, trades a certain way due to that reading, and then more importantly develops computer models to auto-trade per the chartist theory, which reinforces the chartist trend, which feeds back on itself?
or a different reason?
I used to think all technical analysis was hogwash. I still think it’s weatherforecasting at best. But I’m starting to wonder whether the computer models may be changing the reliability of technical analysis (to the more accurate side)
thoughts?
I agree. I used to think technical analysis was nonsense. However, now I believe there may be something to it.
Based on the general stupidity and ignorance of the investing public, how many do you believe even look at charts? Of that number, how many do you suppose understand the charts, even after admiring their pretty patterns for some time?
I believe technical analysis coupled with an awareness of current events coupled with a large dose of common sense can work or at least create a trading advantage.
Chart analysis is superstition or Cargo Cultism, but an evergreen get-rich-quick gimmick for the naive. The “chart” and moving averages can be said to indicate one thing or another, but external facts shape the core of market perception. The chart and trend lines follow from external perceptions…real-world events not expected by the majority cause the big (important) changes in trends.
A significant percentage of traders put faith in charts, so that group does have some effect on prices over the short term. Charts surely have predictive value on obvious simple trends (until they fail), and obvious large deviations from longer trends (until they fail), and for small sectors or stocks manipulated by like-thinking people (until it breaks down). They all fail eventually…
Just another reason why no one (except for the big insiders, e.g., Goldman Sachs, Warren Buffet) can beat the market over the long term.
TxChick –
I never meant to argue the charts don’t work; I just find the reasons they work a bit spurious, not being a big fan of Keynesian beauty pageants. If there are enough believers out there, the phases of the moon will move stock prices, too.
TxChick –
I never meant to argue the charts don’t work; I just find the reasons they work a bit spurious, not being a big fan of Keynesian beauty pageants. If there are enough believers out there, the phases of the moon will move stock prices, too.”
—————————————————————-
but the PPT and planned correlation, now that’s the real thing.
“…now that’s the real thing.”
There is a bit more to it than that. But it is hard to ignore the floor on the downside to U.S. stock market headline indices on correction day, or the fact that they often correct almost to their opening levels. This is prima facie evidence of intervention to spark Keynesian beauty contest rallies by noise traders.
As for the correlation, I am guessing that is driven by the wave motion of a huge quantity of free ions sloshing from one country’s market into the next. The liquidity waves are so large that they swamp out the fundamental signal, at least at the headline index level.
GS:
we’ve debated about PPT intervention before (not that they do/don’t intervene, moreso about extent)
but that said: IF it is PPT intervention, I can think of a few reasons why they’d target NASDAQ and S&P over DJIA.
1) in recessions, large cap big boys usually do better than the smaller guys, and especially the tech sector, which tend to be more volatile, especially in downturns. thus, following this logic, DJIA would need less help
2) all of the DJIA components are part of S&P500. thus propping the S&P will slightly prop the DJIA
3) more investors have their wealth in the S&P and NASDAQ relative to DJIA. so my guess is that those two indices are more important.
That said, if one follows ideas of non-PPT intervention, the same logic holds:
1) S&P and NASDAQ are more volatile than DJIA. thus short term you’ll see more oscillation perhaps in the two former relative to the latter, on both the upside and downside?
2) more investors are in S&P and NASDAQ, so it is more “efficiently” priced compared to DJIA
Not sure I am ready to generalize based on a single day’s charts; I just found it odd that on most days when there appears to be cause for plunge protection, the three headline indexes move in lockstep, while today, the DJIA was allowed to drop much further. It could have just been a technical error at the NY Fed, for all I know…
Footnote: There might have been a technical glitch in marketwatch’s charts earlier, as the lockstep movement of headline indices has now resumed.
“By using the forfeited deposits toward purchases, the company can keep its recorded home prices higher. ‘We want to keep the valuations of the communities up and the neighborhoods up,’ Diers said.
Should have thought about that in 2004. Just how much can one beat a dead cat?
In the current rapidly changing legal/policy environment, they are pretty bold to make such an offer. It’s like opening it up really wide for a deep probing cavity check. Don’t they read the news?
BZH: http://www.cnbc.com/id/17819701/for/cnbc/
Heck, if you want to mislead and defraud the homebuying public why stop at using one forfeited deposit per purchase? Apply five or six different forfeited deposits to each house sold and raise the gross sales price accordingly. It doesn’t affect the net price paid by the buyer, but it makes it look like sales prices are skyrocketing even when they aren’t.
It’s amazing to me that a business would come out and publicize their efforts to con prospective home buyers into thinking prices aren’t falling. The transaction in which the previous buyer’s deposit is forfeited is separate and apart from the transaction with the new buyer. Recording a higher sales price based on a separate failed transaction with another party is fraudulent.
“Rather than keep the cash, Taylor Woodrow is offering other buyers the opportunity to use forfeited deposits toward the purchase of a new home at a few of its communities.”
This sounds like a low-budget way to find the last remaining GFs.
I can’t BELIEVE that anyone would truly buy a home this month. At least had I been one to the FB’s that bought in 4Q/06 I would have felt better about my doomed purchase because I would have not known about the recent bad news.
You’re so right … and yet, think how surprised we would all be if it turned out that Florida home sales for March 07 were actually ZERO. Ha ha, what a thought. It won’t happen. I don’t know who the he77 is still buying, especially considering that they now have to pay (some) actual money, but I bet sales will not be zero. Just low.
I am hoping there is one more transaction in March, because my girlfriend is set to close on her townhouse in the first week of April. Après moi le déluge!
droog, is she buying or selling?
Selling. We are moving into a rental to ride out the apocalypse. She’s as housing-phobic as I!
BTW even the Palm Beach Post, which for years was a major housing cheerleader, has been beating up housing over the last few weeks with its grim headlines. While they’re still not spinning “the truth” it’s a refreshing switch!
I don’t know about that. They seems pretty cheerleading in last weekend’s stuff.
The weekend is when the homebuilders advertise. You have to assume they will dial up the lies on the weekend.
From todays Palm Beach Post
…”A growing number of Realtors in Florida are frustrated with the state and national Realtors groups’ efforts to ’spin’ the market as one that is strengthening and where home prices are stabilizing.
“Many (though probably not yet most) Realtors are frustrated by customers who continue to list their homes at price levels that are ‘unrealistic,’ and as a result, sales volumes - and thus commissions - continue to remain depressed.
“While Realtors have noted to customers that many home builders in Florida have slashed new-home prices in order to move bloated inventories, many home sellers are still holding off, hoping - along with FAR and NAR - that prices will start moving back up soon.”
http://tinyurl.com/27dstl
Believe it. My brother, (you know, the smarter brother) just paid more that $1M for a home in Florida last purchased in 2001 for $550K. As much as I suggested that now was not a good time to buy ANY home in Florida…. I guess I’m glad I’m not on his list of beneficiaries….
Uh, hello, the “deposit” dough is gone. This is just a gimmick to try and hide (again) an actual discount and continue the fiction that prices are “stable”.
What DID Gabriellee do with the extra cash? I bet the reporter never even realized she received that much from the refi, so he/she wouldn’t have thought to ask.
Stupidity is everywhere. And Florida gets hurricanes as an added bonus.
“‘I know I did something stupid but I am going to fight these people ’til my last breath because they are trying to rob me,’ said Cunningham.”
Okay Ms. Pot (calling the kettle black). Where did that 145k go? You were mired in debt and had fallen behind on the original mortgage.
“You fell for the classic blunder: never go against a Christian, when debt is on the line”!
“You were mired in debt and had fallen behind on the original mortgage”
Exactly! And now she claims she was robbed. This is another case of blaming others for your own stupidity.
Yes, I wish the article stated if she got the cash or not. (see my longish note above)
If she got cash back from this, she’s a greedy little bagholder
if she didn’t (which she may not have), then it’s another sad story of stupidity.
After reading the article, it does indeed look like she was actually scammed. Meaning, they promised her that she would not have to make payments for a year or so, but somehow took her name off the deed and stripped the equity.
From the article:
“It’s one of the clearest cases of predatory lending we’ve seen,” he said. “She was basically convinced to sign over title to her home.”
Keep in mind however, that she got herself into finacial trouble before the scam.
If she was a financially responsible person in her life, this scam would have never taken place.
I am having trouble feeling sorry for her.
Dear Mr. Vincent,
Do you know her details? Could she have had a medical issue? Been caring for an ailing family member? Made a bad choice in parents? One never knows.
Mac:
Point taken. Not enough info here on this case.
It is quite obvious that she did get taken based on the article.
actually the article states that:
she had owned the house for some time.
she is working 3 jobs to support herself
she is putting 2 children through college
thus, she fell behind on her mortgage
so no emergency.
then a sweet talking conman got to her.
It is again, a stupid BUT HARDWORKING woman, who made bad choices.
A logical person would tell their children “I’m sorry, I can’t pay your way through college” but this is devastating to a lot of kids and parents. (still, it is what should have been done).
Or a logical person would have downsized into a rental or something so that they could pay for the kids’ college.
she MAY have gotten some money in the deal. The full article does not state either way. But it implies that she did not. However, it goes to show how horrible reporting has become in America.
A good reporter would have made it clear if she got cash out of this deal or not.
I wonder how many others will lose their homes because they felt obligated to fully fund their kids’ tuition payments….another bubble yet to pop.
Kids might actually have to work to afford their college courses again. I had 3 summer part time jobs myself. It doesn’t kill you. And it teaches great time management skills.
You ain’t kidding, Inspector! I worked the entire time I was in college, and hence took 5 years to graduate. My parents did the same. While my parents did buy me textbooks now and then, I just don’t understand why parents financially torture themselves just to put their kid through school. God forbid the kid actually learn about work ethic. So what if they don’t graduate right at 22. Most that age don’t know jack $hit anyways.
CA Guy,
I agree - kids should learn early the value of a buck, and that hard work is rewarded. Personal responsibility is lacking in many kids these days.
That said, I have one getting ready to go in a couple of years. I estimated that if she worked 40 hours per week every summer since the first grade earning $10/hour, she would’ve grossed 57K. After taxes: one year at Villanova, 2.5 at Penn State. Bottom line is the cost of a college education is unbearable to most families, and the subsidies provided do nothing more than inflate tuition costs. I figure when it’s all said and done, the costs to send 3 kids through a 4yr college will be around $400K.
Now, if I had saved $10K a year, every year since the day I was born…one sees the absurdity of tuition inflation pretty quickly. There’s almost a wage enslavement mentaility that accompanies the decision to attend college. Sad.
dd
“You fell for the classic blunder: never go against a Christian, when debt is on the line”!
Bravo, that just made my day! Don’t forget about the H.D.O.U.S.’s (House Debts Of Unusual Size)
I don’t think they exist.
“Frenzied flippers have walked away from contracts to purchase homes as the real estate market has slowed across Florida”
Reminds me of scene from the movie Patton when the germans ran out of gas and started walking back home. LMFAO
From Minyanville (quote)
I am hearing HUGE mortgage bid lists all over the place
Prime, subprime, FNMA, FHLMC
I am also hearing the market is becoming less liquid
My firm continues to lighten exposure to anything smelling remotely of credit risk.
Sell when you can. Not when you have to.
Sell when you can. Not when you have to.
Hey you guys were saying this 2 weeks ago and the DOW gained 3%.
Is it or isn’t it?
Don’t know what you’re talking about. We’ve played this yo-yo like a violin.
You come to a housing board for stock tips??
Oh yes I base ALL my daily decisions on complete strangers typing at their keyboards. It’s the new black didn’t you know?
“‘Prices are going to come down,’ said Jack McCabe, a Deerfield Beach-based housing consultant.
Way to get on the bandwagon Jack. What were your comments 18 months ago again????
Actually, Jack has been talking about the housing bubble for the last 18 months. Although his comments are not always negative, it could be selective quoting by the reporter. I count him among the South Florida housing bears.
“Actually, Jack has been talking about the housing bubble for the last 18 months.”
Jack’s comments on Sept 11, 2005
“The short-term speculator market has peaked. But long-term real estate investment (meaning five to seven years) is still good because we have all the factors that contribute to a strong investment market: population growth, a strong job market and job creation, a scarcity of buildable land and strong environmental barriers. And single-family homes are a better investment.”
A bear? That was when we started to see the real drop!!!
He’s a clown. I still think he’ll get his “investors” in way too soon.
I can’t find his ramblings from 04 and 03 when we were working off from a new economic model. Wish I could. Anyone else got some fun quotes?
Not Jack McCabe, but fun nonetheless…
“Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that ‘South Florida is working off of a totally new economic model than any of us have ever experienced in the past.’ He predicts that a limited supply of land coupled with demand from baby boomers and foreigners will prolong the boom indefinitely.”
New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
Wonder where economist Hank Fishkind went.
Barking up the wrong tree.
See very bearish comments by Jack on Mish’s blog in April 2006. By then, Jack sounded like one of us. He pointed out that 1 of every 57 Floridians had a real estate license. He pointed out that once a builder breaks ground some deposits become non-refundable, and that therefore, certain builders were collecting deposits, breaking ground, and then doing nothing further.
“See very bearish comments by Jack on Mish’s blog in April 2006. By then, Jack sounded like one of us. ”
11 months ago. I’m not attacking the guy. Simply, these so-called experts were part of the problem. How many “long-term” people bought in 05 and early 06 based off irresponsible comments like those I posted?
Jack McCabe is a pretty heavy-hitter in the Boca-Delray-Deerfield area. Although as a RE broker, he did rider the wave like the rest of them, he was more reasonable in calling “BS” on the whole thing than most other brokers. He started being skeptical in 2005. Maybe a little late, but still WAY ahead of other RealtWhores.
“…he was more reasonable in calling “BS” on the whole thing…”
It’s still proof of “experts” being slow to speak truth of this issue. Honestly in reading that, I would have paid $309,900 for my house and felt comfortable because for a long-term investment I would have been OK. Instead, just 14 months later my home was $225,000 and the market is still declining.
That was a Great scene spiral.
Housing and Greed was the Honeypot TRAP this time and I think we’re gonna have more financially Dead Bugs than walking ones .
no worries = all “contained”
in what a briefcase
Bernanke: Mortgage Troubles Contained
About every 30 minutes this morning NPR is talking about the subprime news. This is going to be the 911 of 2007
Oh, good. Now I have another reason to yell at my radio.
txchick
Forgot who wrote the article about that housing market being “Frozen” but perhaps he should do a follow-up about the US Economy heading for the Deep Freeze this Spring.
And apropos to shorts in the commercial RE space: Also from MVille. These are long term short & holds for me anyway
Do you CMBS?
As the iShares REIT ETF (IYR) heads down to to revisit the March lows, the Commerical Mortgage Backed Securities (CMBS) spreads are not waiting around and are now making meaningful new highs for this move. Remember Minyans, CMBS are the oxygen for a sprinter that’s been running full blast for years. Turn it down even a bit and the feeling will be one of choking.
Many moons ago, we warned that a soft landing after a housing boom was nothing more than a hallucination. Thats’ even more true in commercial real estate, where fewer players far more in tune with each other act like the proverbial herd. Once the psychology changes, the party ends before one can say goodnight.
I live in Maryland and was considering pruchasing a second home in the West Palm Beach area. I few weeks ago I looked at this house
http://www.ibiscountryclubrealty.com/listing_sheet/R2744066
and the asking price was $599,000, it has now been reduced to $549,000. The person who purchased this bought another house in the neighborhood and is attemptiong to sell this. This is a second home because the mailing address is in MN. So now he is paying for two houses, two mortgages, two insurance policies, and two HOA bills every month. To purchased the new “third home” he has two mortages totalling $775,000 plus $16,000 RE taxes.
He purchased the house he is trying to sell in June 1996 for $340,000 and it sold before that in August 1994 for $383,000.
I am guessing when the market finally bottoms the house is worth about $400,000 to $425,000. I will wait, if not this one there will be plenty of other opportunites.
Real-estate NEVER loses value. NEVER NEVER!
kThomas:
You must be a San Francisco realtor!?
Okay, headline is that Bernanke says subprime/housing woes are not hitting the econonmy yet.
We’ve got big foreclosures, credit problems at the retail level, and layoffs.
What’s it going to be like when subprime/housing “woes” do hit the economy?
I think Bernenke/Fed are counting on impending Banking Regs and the Credit Crunch to hold the line until this Fall while he secretly continues to bury hundreds of tiny St. Joe statutes on the Washington Mall at midnight.
I read an article recently about how St. Joseph statues are flying off the shelves these days.
Can you get options on statues?
Not to be cynical, but I think they are just holding out until the party in Iran starts. And I don’t think they’ll have to hold out for much longer.
The Bloomberg article says Bernanke is still worried about inflation, which has risks to the upside, but also about growth, which has risks to the downside.
Sounds like the neutral bias is because we’re screwed, but we can’t tell how yet.
Falls don’t usually kill people… it’s that “soft landing” at the bottom of the cliff that’s the KILLER.
Housing news continues to batter stocks….it’s 100 pts down at 11:30 ET.
When the hedge fund meltdown goes into overdrive, the PPT’s plunger won’t be able to clear the sewage backup.
This will be over shortly. I just don’t see what rabbits can be pulled out of the bag.
Lest anyone forget, the great crash of 2000 was in the second week of April.
Yeah, Q1 earnings could be a killer.
I have a report from ground zero…Florida. I went to Florida this past week to visit some relatives. They live near Destin…which is a beautiful beach resort type area in Northwest Florida. What I saw was shocking. I drove around an area known as Crystal Beach and there were dozens of homes for sale. I’d say 30-40 percent of homes had for sale signs. Most said reduced, motivated seller…etc. There were also dramatic price differences between two houses that were basically the same. I picked up at least 15 fliers from the homes and later went to look up the sales history on these homes. I like zillow, but I have also found that homevaluecma.com works pretty well and gives sales data that goes back a long way. Anyways, at one of the houses (a three story beach house) about 2 blocks from the water, which was 1 million by the way, when I stepped out to pick up the flier, this lady came running out and asked me where we were from, if we were in the market, etc. I looked at the sales sheet and it said owner is a registered real estate agent. So, I told her that I liked the area, but I was concerned about insurance and prices. I asked her what insurance would run on her place. She said probably about $15,000/year. I think this explains why everyone is selling down there (in addition to the fact that half the homebuyers were speculators). They are canceling insurance policies left and right. And I don’t see how anyone would pay $15,000 per year to insurance a house whose replacement value is maybe $300,000. When I got home I looked up homes to see what they paid. One neighborhood nearby had a hundred or so 1900-2000 square feet one story brick homes that really weren’t anything special. They were packed together tightly and looked like the kind of home a retired couple might live in. I saw that they had originally sold new for around $150K in 1999. In 2002 they were going for $190’s. In 2004 the high 200’s, then in 2005-2006 jumped into the 400’s. These people were all trying to sell for $412-479K. I’m sorry, but a 300 percent jump in 7 years is a bubble. I will be checking back to see what these houses sell for over the few years. Anybody who says Florida has already seen its price reductions is dreaming. The incomes in that area are pitiful and once the investors can’t find other investors to sell to, they will be forced to make some very heavy haircuts. With insurance rates so high, they won’t be able to simply rent these houses out to cover their expenses.
Sounds like you are talking about Sunsail…
Note that houses in that neighborhood rent for about $1500/month…
Prices have gone nuts in this area and now things are going downhill fast. Fun to be a part to such historic events!
Link to homes for sale in the brick home neighborhood Lane mentioned in his post… Note that these homes were selling in the $200k’s in 2003-4 (also mentioned in Lane’s post)…
Lowest current lising is $355k…
Forgot the link…
http://www.destin123.com/Sunsail.htm
Destinsm,
And the thing is I really like the area. My wife and I are decently paid civilian federal Government employees. We own a house with a substantial amount of equity in the Northeast and we have thought about moving and working at Eglin AFB and living in Destin. We could definitely afford something, but when 50 percent of the homes are for sale, they went up 300 percent in 7 years, insurance rates have quadrupled, and property taxes would be outrageous as new buyers…we’d have to be idiots to do that anytime soon. By the way…my father-in-law is a retired general contractor. If we did move down there, I’d like to pick up some land (since I’ve heard that usually falls first and fastest), and have my father in law help us build a home. Do you have any suggestions for other areas? SanDestin? I’d like to be able to own at least 1/2 acre and be within a couple of miles to the Gulf. Many of the areas around there don’t have lots…they are these fancy planned communities where you have to overpay the developer for the land and the house. I think we have pretty much decided to wait a few years…but if you could suggest areas that might fit my criteria I’d appreciate it.
Santa Rosa Beach… just east of Sandestin has a lot of land for sale… prices are coming down fast there becuase of the huge amount of inventory (tons of it held by specuvestors)… North of 98 is much much much cheaper than what can be found south of 98 on CR 30A…
Wait a second…
Rent for $1500/month?!?
So they rent for about insurance and 10% to 20% of taxes? Oh boy…
Downhill fast is an understatement…
Got popcorn?
Neil
$300,000/$15,000 = 20. Does this imply that the insurance companies calculate that these homes will all be destroyed by weather within 20 years?
I completely agree with all of your remarks and they have a ring of reality to them.
It’s going to be even worse here in Polk, Orange and Osceola counties; where you have Mickey Mouse and those that serve Him as the major draw.
Where I live was ( and still is ) a moderate, sleepy agri/cheap retirement area away from the beaches and 40 miles from The Mouse.
Greedy Asshat Flippers, grifters, Realtors(tm) came in and puffed up a bunch of inflated demand and stoked the fires of frenzy here in Polk county. The Smart Money left the building last year and now we have a bunch of bagholders down here who should never been in a house or participated in the Ponzi Scheme to begin with. Most of ‘em can’t “habla englais” either.
There are several unfinished developments around here near Celebration, and in Davenport, Haines City and South Lakeland that are now growing weed gardens and blighting the landscape. Some of the building ( especially from the “get rich quick” smaller builders ) stopped around 2-3 months ago.
Houses that are sold sit vacant with For Sale / Rent / Owner Finance signs in the yard.
Many busy intersections are festooned with desperate, hand drawn signs barking “Handyman Special”, “Owner Finance- Bankruptcy OK”, and “Price Slashed”.
………………………………….”Got Popcorn?”:)
What are prices like in Celebration? I seem to recall that it was overpriced even before bubble.
And to pay $15,000 a year for insurance! That’s a mortgage payment in of itself. And to think I complained that my homeowners policy increased from $600 to $900 over the past 7 years.
“$15K per year to insure a house whose replacement value is maybe $300K” … That’s even worse than the little house in Maine on which they tried to sell me insurance at about 2% or 3% a year of the re-build cost. My solution was, no insurance. But only a cash buyer gets away with that solution.
why so much in Maine ?
not much storm activity
15K insurance on a 300k house? Unbelievable. 1250 per month is almost as much as the house payment. You might as well just buy 2 houses, carry no insurance, and live in the one that doesn’t get flattened by a hurricane.
“Ross McIntosh, a Naples-based real estate broker, said marketing a home that another buyer has walked away from can be tough”
——————————————————————————-
HaHaHa…..I’d give anything to listen in on this sales pitch!
In addition to S. Florida being a swampy, sweltering hell, it is now a tax lien, foreclosure, and preforeclosure catastrophe. A lot of loss money, lives, and jail time in the near future.
These financial crispy critters (trapped FBer’s) in CreditFornia and Gatorland are surely paying big time for their place in the Sun and being “NEAR” the Water.
I bet that 99.99% of them have NEVER actually swam 30 “blue water” meters in their deep, dark cold Fantacy oceans.
Play that “JAWS” theme music REPOMAN !
OT, but I just read Bernanke’s testimony, could he have hedged any more, basically saying “it will be fine, unless it is not” how much does he make????
enough, but not too much
On CNBC, Bernanke went on and on about how “contained” subprime is and how it’s not big enough to cause problems in the broader market. So, if those subprime borrowers are shut out, who exactly is going to buy all these houses for sale?? If the broader market freezes up, that’s NOT a problem??
My thoughts concerning housing. Alot of blame should be placed on Greenspan. Without the artifical low interest rates, I doubt that the housing sector would have gone nuts.
Lenders took advantage of the rates and anyone that was alive could get a loan. The lenders were placing people in homes that they could not afford. Am sure we will be reading alot about fraud and other misdeeds by lenders.
Speculators….well they are done, no use kicking them around, although I love seeing them down and out.
Home buyers, know what your signing and know WHAT YOU CAN AFFORD. This aspect amazes me. I know what I can afford, and sadly what I can not. I would love to have a home on the coast of Maine, but that is out of my reach. It is not that hard to understand.
This bubble will surpass that of the Tech bubble. This bubble busting at a time of historically low interest rates and unemployment is very disconcerning. I forecast a major downturn to the economy. Not sure of a Depression, but it will feel like one. The consumer is tapped out. Take away HELOC and raising home prices and proverbial “well has run dry”.
Love this …
Prices are going to come down,’ said Jack McCabe, a Deerfield Beach-based housing consultant. ‘It’s the period that I call ‘catch a falling knife.’
Yes this jack McCabe invented the “Catching a falling knife” phrase. OK yes he did.
Cool.
Cow_tipping.
Jack lurks here and he has posted at least once that I know of. He’s OK, he really is one of the more realistic industry voices in Florida.
However, his clients are builders, developers, lenders, etc. So he has to tread carefully on this issue. I think he will do well on the downside, advising his clients on how to deal with the situation.
Jack, if you’re lurking, and if any of your clients are considering West Central Florida, there’s a real void of decent affordable rentals for middle income earners who are middle aged couples and singletons without children. At least in Southshore Tampa Bay. There’s plenty of stuff for the over 55 crowd, large (many vacant) homes for families and income restricted housing for seniors and for guest workers.
To clarify a few things:
1. My quote to the reporter in the PB Post article actually was “this is the catch a falling knife period”. As happens in many articles, the quote was different when it appeared in print.
2. Regarding when I first started discussing the upcoming changes from a boom to bust marketplace, please see the abbreviated article (and date of publication) below.
3. I read this blog almost daily, and recommend it at all my industry speaking engagements. I think Ben does an incredible job compiling the news stories.
4. Tx Chick - did we have a broken romance somewhere in our past? Your posts regarding my quotes seem consistently venomous.
Real Estate Articles from Inman News
Real estate tells tales of impending bubble
Industry concerned over interest rates, increase in home values
Friday, July 16, 2004
“So. Florida will see rising interest rates translate to falling prices and rising foreclosures and bankruptcies. The huge gap between astronomic apprecation rates over the past four years and average household income gains will cause the bubble to burst in many local markets and segments within those, wrote Jack McCabe, CEO of McCabe Research & Consulting.
Take a look at this.. Predicition of 30%-50% drop in prices from somewhere up north.
http://www.poughkeepsiejournal.com/apps/pbcs.dll/article?AID=/20070327/BUSINESS/703270312
“…it’s not nice to have the deposit and be stuck with the unit.”
Boy, what a difference a year makes! Last year there was a land shortage, 20% in the bag, and if you didn’t buy it some “wealthy foreigner” would pounce on it.
I have learned so much from this bubble. Not just about housing, but psychology too.
Have you read any more about how the “baby boomers” were coming to save us? I wonder if the MSM has finally figured out the baby boomers are too broke to save anyone…
Yes, this was a good bubble. I’ve learned my lesson in the dot com bust when it didn’t matter how much money your company earned but how many clicks and eyeballs it got, so I was prepared for this one.
Talk about your shadenfreude, check out this thread on SDCIA forum. The last couple of pages are the best. A real estate genius suddenly becomes the ‘victim’ and wants out of his Cape Coral ‘investments’, which in 2005 (start of the thread) were sheer, can’t-lose, brilliance…
http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=444014&trail=30
Ahhhh, time to wake up and smell the kharma….
Rather than keep the cash, Taylor Woodrow is offering other buyers the opportunity to use forfeited deposits toward the purchase of a new home at a few of its communities.”
So let me get this straight. First, you keep the price outlandishly high. Second, you “give” a forfeited deposit to a buyer who then has to pay income tax on that “gift” at his/her/their marginal tax rate. Third, that foolish buyer then has to pay real estate tax on that money for the rest of his life because it is included in the appraisal of the house.
What a great deal for the buyer! Do you charge extra for lubrication?
Why do idiots insist in spreading their “investments” across the country. If one neighborhood is good for one unit, then it is good for two, three, etc. If not, you’re simply grabbing your ankles.
Paul
“‘They will be able to buy a home that already has the deposit in place,’ said Tim Diers, director of sales and marketing for Taylor Woodrow’s Southwest Division.”
In other words, “You don’t need to afford a down payment to own a home.”
Some people never learn.
“Frenzied flippers have walked away from contracts to purchase homes as the real estate market has slowed across Florida”
Reminds me of scene from the movie Patton when the germans ran out of gas and started walking back home. LMFAO
That scene was in “Battle of the Bulge.”
Sorry to post again, but I can’t seem to wrap my head around $15,000.00/year for insurance. Is this an accurate number that someone can verify? Is that typical from various insurance companies? Is Florida putting a cap on insurance premium increases? Fascinating.
Yes, the number is accurate and common. The numbers have everything to do with Location and, to a lesser extent, the size of the property (duh).
The problem is that you can’t get private insurance for any home in Florida that is near the water (or, somewhat near but built before 1960) - the big insurers have all but backed out of that market. Therefore, the only place you can go for a quote is the state of Florida’s ” Citizen’s Insurance”, which is legally mandated to be the most expensive insurance on the market. It is not rare, then, to have a quote for insurance that is in the 6-figure range. I saw a citizen’s quote recently for a home pretty far inland (1 or 2 miles) for a 1958 home, 100ft2, for $4600
Thnks
To clarify a few things:
1. My quote to the reporter in the PB Post article actually was “this is the catch a falling knife period”. As happens in many articles, the quote was different when it appeared in print.
2. Regarding when I first started discussing the upcoming changes from a boom to bust marketplace, please see the abbreviated article (and date of publication) below.
3. I read this blog almost daily, and recommend it at all my industry speaking engagements. I think Ben does an incredible job compiling the news stories.
4. Tx Chick - did we have a broken romance somewhere in our past? Your posts regarding my quotes seem consistently venomous.
Real Estate Articles from Inman News
Real estate tells tales of impending bubble
Industry concerned over interest rates, increase in home values
Friday, July 16, 2004
“So. Florida will see rising interest rates translate to falling prices and rising foreclosures and bankruptcies. The huge gap between astronomic apprecation rates over the past four years and average household income gains will cause the bubble to burst in many local markets and segments within those, wrote Jack McCabe, CEO of McCabe Research & Consulting.