It’s A Boom Bust World
The Palm Beach Post reports from Florida. “The Briny Breezes sale is off. Ocean Land Developers sent certified documents this morning telling the corporate board the deal to buy the mobile home park for $510 million and convert it to a resort had fallen through, Ocean Land VP Logan Pierson said.”
“Real estate experts suggest Ocean Land’s demand for an extension was just a convenient way to make the deal go away because in today’s real estate market this deal no longer made as much sense.”
“‘Financing has become so incredibly difficult for just about any size developer. Huge developers are in a world of trouble, they are not even looking at new deals,’ said one expert, who didn’t want to be identified.”
“Joseph Good of ComNet Realty has worked with Ocean Land and saidhe believes the decision to walk away was market driven. ‘It’s terrifying; there seems to be an absence of buyers and to do a high-rise multi-unit project, any lender is going to require pre-sale sand right now– it’s hard to get presales,’ Good said. ‘It’s a boom bust world.’”
The Orlando Sentinel from Florida. “Condominium hotels may go down as one of the briefest fads ever to sweep the real-estate industry as the market slumps in Central Florida, only a year after it peaked. Potential buyers are disappearing and financing commitments are falling flat, leaving condo-hotel developers with an uncertain future.”
“Last week, the first such hotel to open in downtown Orlando filed for bankruptcy protection, a failure the developer blamed on a rapidly changing market.”
“‘Our sales were good in the beginning, but it got bad, bad, bad and then even worse,’ said Barry Greer, an owner of The Lexington at Orlando CityPlace. ‘The market was red-hot when we started this, but it folded up before we could close it out.’”
“‘There is essentially no condo-hotel market left this year,’ said Dante Alexander, CEO of the National Association of Condo Hotel Owners. ‘Eighty-five percent of the buyers were relying on second mortgages to buy their units, and that is gone. The mad money is gone from the market.’”
“Mark Lunt, a senior manager with Ernst & Young Hospitality Advisory Services, said condo-hotel units are real estate, and interest in them has fallen with the unraveling of the real-estate market. ‘Condominium hotels are an extremely risky asset class,’ Lunt said. ‘I think the market is falling apart in the condo-hotel sector in much the same way that it is falling apart in the condominium sector in general.’”
The Miami Herald. “In Florida, the number of foreclosures is up 77 percent compared to the same six months last year, RealtyTrac said. In South Florida, foreclosures have tripled in Miami-Dade County and Broward County in the first six months of the year, according to data from the counties.”
“Payment shock recently hit Rene Asor, who lives in Key West. Caught unaware, his monthly payment soared from $2,400 to $3,799. Asor fell behind, then caught up. But he doesn’t think he can hang on much longer.”
“He said his lender, Countrywide Home Loans, has offered little help but to refinance. ‘I’m going to go into foreclosure,’ Asor said. ‘Even to do a refinance it costs more money, the closing and all that.’”
Frtom WTVJ. “Homeowner Robert Dodds is not unlike many others in South Florida. ‘I wanted to get the house on the market at a good price and see if I can be out of here before anything would progress such as foreclosure,’ he said. ‘I need to sell the house.’”
“Ron Sheffield, president of Esslinger-Wooten-Maxwell Realtors, told NBC6, ‘If half your neighborhood is in foreclosure, half your condominium buildings in foreclosure, that will certainly impact your value.’”
“Zip code 33160, Aventura/North Miami Beach, ranked No. 19 in the nation and highest in South Florida. In that area, 480 properties went into foreclosure this year. ‘Not really what you’d expect when you look at the socio-economic picture in the North Miami Beach/Aventura area,’ said Sean Donahue of lender HomeBanc.”
“‘You can look at all the statistics and they are pointing to more and more foreclosures coming and that will drive down prices,’ said realtor Felix Tristani.”
“‘I think we are seeing significant deals in all zip codes now,’ said Sheffield.”
The Sun Sentinel. “Mounting mortgage defaults across South Florida threaten to hurt more than just those homeowners who lose their properties to lenders.”
“In the Tree Tops development in Wellington, one property near the entrance is in foreclosure and has been on the market for months. The vacant house has a rickety wooden fence, missing roof tiles and, until recently, a front yard full of weeds.”
“A buyer just walked away from a $190,000 contract on the home, where comparable homes go for as much has $240,000. As a result, neighbors trying to sell their wood-frame homes built in the early 1980s could have a hard time getting their asking prices, said Deanne Lee, a real estate agent who lives one street from the house in foreclosure.”
“‘It’s a scary thought,’ Lee said. ‘I see this as just the beginning.’”
“The number of Palm Beach County homeowners behind on their mortgage payments topped 1,000 in June, almost a fourfold increase from 259 a year ago.”
“In Floral Park, a foreclosed house went on the market down the street from Joe Rodriguez. It sold recently for just more than $263,000. As a result, Rodriguez is worried that he could have a hard time getting his $369,900 asking price, even though his four-bedroom corner property is bigger and includes a pool table as an incentive.”
“‘It’s a bad sign,’ Rodriguez said of foreclosures. ‘If the banks turn around and sell them for less, sure, it’s going to hurt [other sellers nearby.]‘”
“Because lenders don’t want to be in the real estate business, they’ll likely sell those properties quickly and at a loss that will reduce home values. ‘They’ll be bought by investors who will try to rent them out at a profit,’ said said Alan Hunter, a senior market analyst with Metrostudy.”
“Regardless, the downward pressure on prices actually will be good in the long run for overpriced markets, including South Florida, said Mark Vitner, senior economist for Wachovia Securities.”
“‘It’s going to help speed up the adjustment process,’ Vitner said. ‘More homes will get into the hands of more willing sellers, the banks or whomever. It’s a necessary thing.’”
From Florida Trend. “As Florida’s housing boom rolled along, Michael Wood read investment books and went to weekend real estate seminars to learn how to cash in. At the seminars, he was approached frequently by mortgage brokers offering loans to help him build a home and flip it.”
“Wood saw little risk. ‘It was strongly suggested that it was going to be 20% to 30% profit and that people were putting homes on the market and selling before construction was even complete,’ he said.”
“In early 2005, Wood signed up to build not one, but two homes, both in North Port. He had so much confidence in his friend that he let him handle everything from choosing the lots to the building plans. He took on more than $400,000 in debt and even started convincing his friends and family to sign up. ‘I’ve got seven or eight family members in this deal,’ Wood says.”
“But toward the end of 2005, Wood’s heavily mortgaged friends and family members began to harangue him with phone messages. They’d seen little or no construction activity on their lots, yet interest was piling up monthly on their loans.”
“In 2006, Construction Compliance finally broke ground on Wood’s first home. By August, it was nearly finished. But then ‘everything just stopped.’”
“Liens started pouring in on the house that was nearly complete, filed by subcontractors and suppliers who had never been paid. Then, Wood discovered that (the) firm had drawn $80,000 of his Coast Bank loan for work on his other home but had never started construction.”
“‘The bank allowed the builder to draw $80,000 without ever touching the lot,’ Wood says. ‘I am now out close to $90,000 for a lot that was never cleared — I don’t think anyone ever even walked on it.’”
The Independent Mail from South Carolina. “You’ve found the house you want but can’t seem to sell the one you have. It’s become an all-too-familiar problem for many people. As residential building and new home sales slow across the Upstate, housing is a buyer’s market, said Debbie Dorn, a Realtor in Anderson.”
“One of her clients, who wanted to move from Florida to Anderson, dropped the asking price on a home from $450,000 to $375,000 after 120 days on the market.”
“Ms. Dorn often hears similar stories, and local Realtors say the increasing number of people tied to their old houses is one of several reasons that a slowdown in the housing market nationally finally is reaching the Upstate.”
“‘There’s not too many people who can afford to buy a new house before their old house sells,’ said Tom Carr, a Realtor in Anderson.”
“The drop in sales could be…a sign that the baby boomers who have been driving the marketplace for lake homes, second homes and resort properties have reached the tipping point as buyers, said Dave Chamblee, owner of Anderson Area Properties.”
“At some point, baby boomers’ buying will slow. Then they’ll become sellers, Mr. Chamblee said.”
From WPDE in South Carolina. “The number of those who lose their homes to foreclosure is on the rise in South Carolina, up more than 50% since last year. The Homeownership Resource Center reports that there have been 224 active foreclosures in Horry County this year alone.”
“Realtors said the housing market went up in 2005 and has since adjusted, but not all investors are adjusting well.”
“Joni Burleson with Century 21 said, ‘A lot of investors come in buying at high peak, and now they’re selling for 10’s of thousands of dollars less, and they’re having a hard time making payments.’”
Another reason rent-to=purchase ratios ultimately matter:
‘They’ll be bought by investors who will try to rent them out at a profit,’ said said Alan Hunter’
A thousand a day moving to Florida?
‘A couple of years ago, Hillsborough school officials were so worried about overcrowded campuses that they talked about double sessions, a year-round school calendar, raising taxes and bringing in more portable classrooms.’
‘But this school year, enrollment will likely drop by nearly 4,300 students, an extraordinary reversal after nearly a quarter-century of unstopped growth. The main reason for the change: Families are avoiding Florida because of the rising cost of living here, officials say.;
;The last couple of years, with insurance rates and housing costs, we aren’t as inexpensive as we used to be,; said Jim Hosler, a demographer hired by the school district to examine enrollment trends. So today, they’re expected to vote on a plan to scale back the district’s school construction schedule, canceling a planned high school and two elementary schools, and delaying two middle schools.’
‘We won’t need another high school for 20 years’ after two new high schools open in 2009, said Cathy Valdes, the district’s chief facilities officer.’
‘School districts all over Florida are losing students. Last year was the third consecutive year that fewer students showed up statewide than were expected.’
Ben, you have to love this guy Cramer, he went from, contained to this.
http://www.youtube.com/watch?v=c7e9H4zTqk4
I mean when you get these guys saying this and the market continues to go up on….whatever info….you know the bust is going to be just that much worse.
Holy cow! OK, Mr. Cramer, what’s your screen-name?
LOL. I can’t believe it!
As usual, if you’re hearing it from Cramer, it’s already too late. Horse already left the barn.
I think it is irresponsible for any talking head on a business show to be suggesting to the public to walk on their obigations . He just wants people to have more money for the stock market so he can have his bull-run that he wants .
Excuse me , obligations not obigations . This guy Crammer is one of the problem we have in America today . We have salespeople trying to create a market rather than a true market being there based on the facts .
I don’t know if this is true or not and I was only half listening, but my husband said something to me last night when we saw this that Cramer had a bunch of RE stock or some sort of investment in the RE industry. And now he has gotten rid of it and that is why he is finally changing his tune — now that there is no longer risk to him. Is there a way to find out if that is true or not?
Again, I could be completely off base as I wasn’t fully listening.
I can’t believe what a hypocrite he is! There’s another video on Cramer on Youtube where he drones on about how stupid the “bears” are about housing falling apart and it all having an effect on the housing market…he says this sounding like a pompous ass and he said it back in 10/2006…wow, just, wow… could someone please call him on it? call his show and smear his bull**it in his face, please!!!!
The Fed lowering rates by 1% wouldn’t matter much — who would be lending the money, and on what terms? Now that people know Option ARMs and other subslime loans are the kiss of death, they’re unlikely to touch them anytime soon no matter what the teaser rate.
Cramass: “walk away”
Chorus:
“Turn around and walk away…alone, alone”
“Turn around and walk away…alone, alone”
Boz Scaggs
http://en.wikipedia.org/wiki/Boz_Skaggs
I don’t agree that prices would go up if interest rates were to drop 1%. Most of these people have “no” money I don’t care if the rates go to 0%.
That was a great clip.
When he mentioned that the Fed could turn it around by slashing interest rates, I immediately thought, “Hmm. Oil just passed $78 a barrel. How likely is it the Fed will slash rates with inflation raging and oil passing $80 a barrel?”
The Fed won’t cut until unemployment rises to 5% and the economy is in a recession - in other words, around November.
Also, continuing with this somewhat juvenile but not-unpleasant sport of Cramer bashing
- during the slowdown in the economy and the stockmarket in Feb., Cramer said no worries because Fed would cut in May. Meanwhile, Dykstra still needs to learn that, besides paying higher commissions and dealing with much higher buy-sell spreads, leverage on his brilliant deep-in-the-money call buying strategy works in reverse, too. (Nice timing on the Macau play, too, Cramer. . .
Anyone who has ever spent time around a cokehead would come to the conclusion that Mr Cramer is packing his beak on a regular basis.
In CA they would always talk about how schools were overcrowded. The problem was that the schools were only overcrowded because they were taking on so many illegals or children of illegals. Since their parents never paid more in taxes then they took out of the system, tax rates had to go up for everyone else and structural deficits were the norm. In many school districts, the spanish only rate exceeds the english proficiency rate. That is why the Ed industry supports unlimited illegal immigration even though it destroys the quality of the system, by having them there, it justifies every increasing budgets and salaries because of “overcrowded” schools. School overcrowding is a terrible sham played on the taxpayer.
Plus bilingual teachers are paid more (my sister in one)
We live in Florida which has probably one of the worst school systems in the country. In South Florida, we have had illegal and legal immigration burdening the sytem for a long time. The issue has always been that the retirees had no vested interest in education and would never vote for improvements. They have a different agenda and could care less about the future generations. And politicians serve their base not the public interest.
I am more apt to put the onus on the system that is refusing to deal with the illegal immigration, our failing educational system and much more.
I live in a pretty nice area surrounded by million dollar homes ( I rent thankyouverymuch) and we are overburdened and each school has portables to take care of overflow. We don’t have an illegal problem. It’s that there are few good school districts and people flock to those. Of course, only those who make six figures or so can afford to live in this area and so only the Richie Rich kids get the best education.
um, ok, “legal immigrants” burdening a system. So the public education is only for native americans now? Please try to explain this one without coming across as a 1930’s era Strom Thurmond.
I’ll be looking to see how this plays out in Lee County this school year. The schools are planning for an increase but there might not be much of one this year. Unlike much of the rest of the state, Lee County schools still had a significant increase in students in 2006-07, but it was less than projected.
“Payment shock recently hit Rene Asor, who lives in Key West. Caught unaware, his monthly payment soared from $2,400 to $3,799. Asor fell behind, then caught up. But he doesn’t think he can hang on much longer.”
That is a huge payment jump in my mind.Not sure what the hell these people were thinking when they got these shotty loans. I doubt he will hang on much longer.
What? The guy was planning on a huge raise. I know many people who overspent on housing/cars/toys banking on a promotion or new job that never came.
The local kindergarten has gone from enough kids for 3 1/2 classes down to enough for 1 1/2 classes. Speculation that young families (ie those that don’t already own real estate) have been priced out of the area. Imagine that.
How are private schools doing in Florida?
That elementary school across the street from Cal Poly has been closed for several years now. I used to walk across the grounds on my way to class…it’s just eerie…like the playground scene at the beginning of the Terminator.
FWIW, us people with no kids can’t really afford to live here, either. The only reason I’m still around is I’m grandfathered in on a sweet rental deal in See Canyon…but when that is over, we’re getting the hell out of California, housing bust or no bust.
bet they still raise tax rates- no gov worker can EVER be fired
You got that right !!!
There’s a link to a good piece related to that on today’s Lew Rockwell site:
http://www.lewrockwell.com/tucker/tucker79.html
“The drop in sales could be…a sign that the baby boomers who have been driving the marketplace for lake homes, second homes and resort properties have reached the tipping point as buyers, said Dave Chamblee, owner of Anderson Area Properties.”
“At some point, baby boomers’ buying will slow. Then they’ll become sellers, Mr. Chamblee said.”
We’ll see a lot more of that in a few years. It will be like a Chinese laundry. Boomers won’t be able to get business from anyone but each other. What a comical picture! It amazes me beyond belief that most boomers did not stop to think about who will buy their second or third homes when there are fewer young people to buy from them. Now the the immigration bill has been resoundly defeated, not likely will we see more of non-American multi-families buying single family homes either.
Bill,
You are very correct, I have often wondered the exact same thing, Baby Boomers relied on the past as a guide, but the world is entirely different now. When they were growing up, each generation was larger and more prosperous than the last. Not so this time around, in fact, this is the first time in american history that many children will have a lower standard of living than there parents.
Also very scary thing is that BB’s have done a very poor job at retirement planning, most have little to no savings and are relying on their home as their primary retirement account. They underfund their 401K’s or worse liquidate them to throw money on a depreciating stucco box.
Third, the comming cash crunch from all those BB’s moving into total consumption/governement entitlement mode is going to fundamentally change this country. There was an article yesterday that pointed out that by 2030 Federal entitlement programs will comprise 75% of the Fed Budget - in short, todays benefit programs are nearly impossible to fund.
Nearly?
You are absolutely correct. Generational warfare is coming. Young people are not only going to be extremely PO’d that prior generations used all the easy-to-get energy, they are also going to be extremely angry about virtually all of their taxes going to three things:
1. Paying interest on the national debt
2. Death and destruction carried out by US military
3. Baby boomer entitlements
To me, the monetary system, media, and warfare system are so closely intertwined and are sucking us dry, like vampires.
I suggest everyone watch
War Made Easy
Don’t forget public employee pensions and free lifelong health care. And that’s not just for boomers.
Have a city-worker friend who gets a 5-to-1 match on his 401(k) as well as a pension. Talk about wasting taxpayer money.
I got a firefighter buddy that retired @ 50 + two months with a pension of 87% of his $190,000. salary….
I work for county gov’t in Florida. The county just sent out 200 pink slips. No one here recieved free health care after retirement. I pay $200 a month for me a my child. And as for your friend getting “5-to-1 match on his 401(k)” BS. Gov’t don’t have 401K. They are very limited in the match. Where does your friend work, I would like to apply for a job.
I am a Broward employee. I pay $350 per month to put my family of four on an HMO plan. Yes the plan is good, but its not free. Also Nancy is right, gov’t doesn’t have 401k we have 457 plans which have no match. We do have a pension that pays about 60% our salary after 30 yrs of service. Most county workers make between 35k-55k a year here in Broward.
Young people have got to become radicalized and start opposing ALL increases in SS, Medicare, drug benefit programs, tax breaks to the elderly, etc. One place to start is to boycott businesses that give breaks to AARP and the elderly and tell them why you are doing it. A discount for the elderly or retired is a surcharge on the non-elderly or working population - it’s that simple.
People are getting older, the elderly are gaining more and more power, and the under-40s have got to stand up and fight. Practice on your parents; tell them how you feel about it; don’t let old people intimidate you. They do not deserve in any way what they are taking. Buy your own damn drugs, for god sake, don’t steal my money to do it!
(This is paraphrasing my very first posts about a year ago which I was flamed for - BTW, I’m a boomer myself.)
Senior discounts at fast food places need to go. I’m a senior and work for Burger King.
I’m also a senior. In addition to the reductions talked about above, I would stop public funding of all medical research that’s aimed at extending lifespans. How idiotic, trying to make the demographic problem even worse.
As mentioned before, we dropped our AARP membership because they always want more programs and more spending for seniors. Sorry, the working generations can’t afford it.
I would think senior discounts at fast food places were essential to keeping the senior headcount down.
Nope. It just lowers the life expectancy of the younger, poorer groups. It’s cheap compared to better restaurants but not nearly as cheap as cooking good food yourself. We rarely eat fast food.
Rainmayun - good one — LOL.
You are very correct, I have often wondered the exact same thing, Baby Boomers relied on the past as a guide, but the world is entirely different now. When they were growing up, each generation was larger and more prosperous than the last. Not so this time around, in fact, this is the first time in american history that many children will have a lower standard of living than there parents.
I have always felt lucky to be a “tweener.” I get to benefit from the mistakes/advantages of the Boomers.
Most of our family is living better than our parents but it seems we have hit a wall. In order for us to do better we have all had to move away from our hometowns. I recently visited my very blue-collar family who did stay and I felt like I was on the set of the ’70’s show. They will be lucky not to end up eating dog or cat food in their retirement.
FYI - I grew up on SoBe as my parents had business there for decades. I did see old people eating dog food because they would run out of SS and whatever retirement they had. All the while their children were living high on the hog usually in the NE.
I can’t imagine what this will do to so many baby boomers at the cusp of retirement.
I may invest in dog food (not from China!)
Come on you guys ,we can’t have seniors starving in the streets . Most people that are going to retire paid into the system for 50 years to get the modest SSI benefits that the government promised .
Most senior couples have a supplement to Medicare to get decent medical care ,so, they are paying more like $500 a month or more for your average senior couple if you take co-pays into consideration. A baby boomer who isn’t 65 yet that gets a good medical policy has to pay $600 to $800 a month for good coverage if they aren’t lucky enough to have part of the benefits paid by their employer . The average young person between 25 and 35 is paying $150 to $250 for medical coverage per month,(of course it cost more for a family ) . So , don’t think that older people aren’t paying alot these days for medical care ,in spite of Medicare .
The system is out of whack . Incomes are not going up to the degree they should . Corporations are selling out America ,so younger Americans aren’t getting these better paying jobs they need . We need to start taxing Corporations that gain by taking jobs from Americans in a form of a tax on anything that comes in from outside our borders .Prices would go up on products however , but I’m always in favor of keeping the incomes up when prices go up .
The sad state of affairs in America is part of the reason why young and old people were so vunerable to the get rich quick scheme of the housing bubble . America just avoided the real problems that were facing America by this diversion into the housing boom .
Those who are currently retired paid a pittance compared to what they are receiving. It’s hardly even measurable for those 80+. It’s a pyramid scheme. The boomers are in the middle of the pyramid and will likely get back payments which somewhat reflect what they have paid in. Gen-X and Gen-Y cas only hope to minimize the damage to themselves by fighting to reduce benefits to everybody.
Sorry to be “cruel,” but the majority of people who end up in poverty are guilty of bad decision-making, and, yes, greed. I don’t agree with the definition of greed that most people on this blog use. To me greed is simply consuming more than you produce. If other people don’t want to sacrifice their wealth to buy what you offer to the market, you ain’t producing anything.
I have paid more than a “pittance”…Been self employed for 32 years so I get to pay both sides of the SS tax…Furthermore, my medical is not even deductable thereby making it twice as expensive then it already is…
Everybody pays both sides. Employees pay it implicitly in lost wages. And someone retiring today started out paying about 2 1/2% (5% counting both sides). Yes, it’s perhaps more than a pittance, and there is a huge difference between a pre-baby boomer (65) and someone 80 - in fact, there’ s a huge difference between 85, 75, 65, and 55. But the fact remains that even today’s newly- SS/Medicare eligible, most especially women, will collect more in retirement benefits than they paid in. I don’t know where the break-even is yet, but even if a 55-year-old ends up getting less than “deserved,” it doesn’t mitigate the fact that the younger you are the more vulnerable you are, and the loudest you should be yelling.
It really becomes a real problem in a culture when the young people think that the only answer to the financial problems are denying the older people ,and getting rid of them . The baby boomers are now paying for their parents retirement ,(in large part the depression/WWII generation ),who did not pay as much in as the baby boomers have ,but they fought a bad war so we live in a free America today because of it .
This war between the young and the old is misdirected anger . America needs the proper answers without harming or cheating any of the generations . We need good paying jobs for the young Americans . We need to keep a strong middle-class in America or we are going to lose America as we know it . If we lose America you will have to worry more about fighting other countries than you will worry about benefits that the older generations might get .
will collect more in retirement benefits than they paid in
Tell that to my Dad who paid in for 36 years and died @ 55………….
Financial and other security should come from one’s own arrangements, whether they be strong family, church, savings, insurance, or simply fierce self-reliance. This is what made America what it is and makes it different from and (IMO) better than other countries. Even though your argument sounds plausible, it is flawed. Forced intergenerational wealth transfers are socialistic, immoral, and anti-the America that you seem to claim not to want to lose.
The fact is America is so far down the road to socialism already (despite lagging behind the rest of the developed world!) that the “America as we know it” is fast disappearing.
The solution is not more socialism, it is less. You say we need high-paying jobs for young people. Workers create jobs, not the government. When people have opportunity, they supply labor and human capital. The way to “create” jobs is to shrink the government - in fact, it’s the only way.
shrink the government ??
Amen to that….Won’t happen without a depression though….
Paul in Jax . What your calling socialism was really the government spending the money that was put into the SSI accounts by Baby Boomers for years,(as well as other workers ) . It’s not as if the BB’s didn’t pay for the benefits promised , and than some .
They are already taxing SSI if you make over a certain amount ,where before they didn’t . I suspect the gov. will start extending the start date to start collecting benefits even more .Look to the gov. to start reducing or taxing benefits for seniors who have amble savings/benefits ,aside from SSI .It is socialism when you don’t deliver on benefits paid for by a class in the name of using funds for the poor or people that didn’t save for retirement .I think there is a issue here also about the high cost of health care these days that might need to be addressed .
I would agree that a baby boomer would be stupid indeed to think that they could survive on SSI benefits alone ,but there will be millions that will be in that spot .
A younger person does have the advantage of seeing what can happen and plan for their retirement in a better way than prior generations have . There is no excuse for baby boomers not planning better for retirement or counting on real estate to bail them out .
Enough of these internet urban myths on baby boomers. Enough of passing unwarranted assumptions on how there are zillions of people born right after WWII, and hardly any now. This kind of fallacy is bad enough on the internet, but it gets constantly repeated in the press.
Check out the census bureau live birth rates. It was not until almost 10 years after the end of WWII that births hit 4 million. This was hit for a few years in the early 90s, and then by 2000…
The fact is that the birth rates have been ratcheting upward since WWII, with a few bounces lower only to pick up again.
There is no over huge balancer of baby boomers vs non baby-boomers
“There is no over huge balancer of baby boomers vs non baby-boomers”
You are wrong:
http://www.census.gov/ipc/prod/97agewc.pdf
Looks like a snake that swallowed a mouse.
But more importantly, that whole cohort just won’t die the way they’re supposed to upon reaching retirement age - which will make a fairly minor problem, far, far worse.
Actually, I am right:
http://www.infoplease.com/ipa/A0005067.html
wow consumer sentiment up biggest in 6 years
house down 20k ,but gas is under $ 4 !!!!!!! I’m going to buy an SUV
That one floored me too. Where are they hiding all these confident people?
Well we chased them away from here….
Jim — another good one. LOL. Had a lousy day — needed these quips.
Golly gee
and here i am beginning to try and sell my home in sarasota fl
nice 3/2 pool 7 yrs old great curb appeal
i owe 174.000 i will let it go for ………….?
wish me luck
Via Con Dios Senior!
MIKE,
Someone just bought my uncle’s $390k condo in Sarasota (on the market over a year, down $100k). Apparently there are buyers out there (his had all cash, from out of state). He turned down an offer of $490k early in the process….maybe you take what you can get, now.
There is no lack of Greater Fools on the upside of a boom - and no lack of Greater Fools on the downside of a bust.
How about 200K?
I wouldn’t pay that for a 3/2 anywhere in Florida. To be honest, I wouldn’t pay 175K for a 3/2 in Sarasota. Depending on how nice it is, maybe 135-150K at best.
While inventories grows and sales drop, I still don’t see the perspective back to normal. How many people can afford a $200K home? $175K is a strech for a teacher, a cop, a fireman …
But I’m not a realtor. I’m just a buyer.
“Mark Lunt, a senior manager with Ernst & Young Hospitality Advisory Services, said condo-hotel units are real estate, and interest in them has fallen with the unraveling of the real-estate market. ‘Condominium hotels are an extremely risky asset class,’ Lunt said. ‘I think the market is falling apart in the condo-hotel sector in much the same way that it is falling apart in the condominium sector in general.’”
Ouch, did he say Hotels? What does this say for Blackstone who paid Billions for Hilton?
No, he means condo hotels, also known as condotels. You buy a room, efficiency suite, whatever, and put it back in the rental pool. A management company rents out your unit like a hotel room.
Here’s an example. This one is an older one, been around a while.
Each unit is individually owned.
http://www.sailport.com/
Hypothetical question: Why would I, as an investor seeking a return in the hospitality industry, prefer to do this instead of just buying stock in a hotel chain?
The theory is that you also get to use the room if you wish while on vacation. Can’t do that with you stock certificate. Still a bad idea. I wonder what has been happening to the market in another bad idea, timeshares?
I think that condotels are the worst idea to come along — even making timeshares look almost respectable. IMO, the time to buy a timeshare is late in a deep recession, when people are walking away from timeshares — *in desirable locations and at good times of the year.* A buddy of mine bought two prime Christmas-season weeks at a nice place in Lake Buena Vista (adjacent to Disney) for $400 or $500 each — the cost of the transfer fee. Now these friends can stay at the best places in the world. Timeshare owners, in droves, will “hand in the keys” when their financial affairs are collapsing. Happens every time — what’s the most expendable thing you own that is costing you each year? Overboard.
“‘It’s going to help speed up the adjustment process,’ Vitner said. ‘More homes will get into the hands of more willing sellers, the banks or whomever. It’s a necessary thing.’”
Are lenders really “more willing” sellers at this point? Isn’t inventory of REO homes still growing much faster than sales of these homes? Secondly, are “willing” sellers enough if there are few buyers? Don’t you need both for the downward correction to occur?
inventory of REO homes still growing much faster than sales ??
My experience in 81-82 & 91-92 was that the lenders are slow to bring to market there REO’s…Why ?? Not sure other than they wait to try and determine just how many they are going to get before they go into a liquidation mode….
“the lenders are slow to bring to market there REO’s…Why ??”
So that they can keep them on their books at “book value”, thinking that the market will turn “soon”. If they have to reprice to current “market value”, things look very bad, because they then have to book a loss, and they can’t loan out as much (reserve requirements).
Hey, wait, aren’t we also seeing some reluctance to “mark to market” somewhere else? Hmmmm…
Banks can’t keep the REO on the books at book value plus REO ties up way more capital than a single family loan. Check the banking regs.
What do they keep them on the books as then? What price can they use if they never sell them (ie keep them listed at pre-bubble prices)? Are you saying that they periodically re-appraise their entire REO inventory and use the appraised values? That doesn’t sound correct.
Banks move in herds, so no one can be singled out. Keeping REO at book value keeps the stock up and bonuses up. They will hold onto their REO until one day they will all be “surprised at the losses” at the same time, and demand a bail-out with one voice. This was the way the RTC was started in the 80’s to bail out the S&Ls. Makes sense–the longer the bank waits, the bigger the problem becomes until there will be no other way out than a bail-out, and the more the taxpayer will pick up the tab.
Correct, they will wait and take a “big bath” as opposed to a lot of “small baths”.
In my opinion, banks will take a bath on REOs when the tide turns decisively.
Why? If you’re running a company and things start to deteriorate, yet other companies are reporting “good” numbers the inclination will be to do ANYTHING to paper things over….for a while. Hey, things might actually improve if you hang in there, no? Being first to report problems earns you no points, its simply interpreted as you are “incompetent”.
On the other hand, once the damn breaks with bad news, there is a reverse inclination. You can break bad news without fear of standing alone. In fact, you may have an incentive to really get the crap out (reporting wise) even if you are pretty strong to begin with. This way your stock price won’t drop disproportionately (its probably already dropped along with others in your field anyway).
Better yet, if you know your company/bank is relatively strong, getting all the bad stuff out early MIGHT allow you to, say, get options set up at a relatively LOW point.
So, when things start to turn bad, you’ll delay, delay, delay until you have company to hide behind. When it hits the fan, you clean house and throw everything out, take the hit on even the most marginal financial calls. Then you buy your stock and soon report your “remarkable turnaround”.
Maybe this behavior is why stock earnings aren’t as hot as they appear at the end of a cycle nor as bad as they appear at the begining of a new cycle.
I wonder how many RE Kool Aide drinkers with cash reserves got nutty on this? What I mean is we are obviously in the middle of a slide no doubt, but to them it looked like grabbing cheap stocks that are going to turn around in no time and have the same gains of the last 5 years. I bet these are the people who have been grabbing up all these “bargains” and creating the sales, outside of people who believe they are forced into getting a home now and can’t wait for what ever reason. The latter are probably in a better impression than those who believe they are scooping up these “bargains” at close out pricing….and will be even lower in 6 months and not see the same pricing for who knows how long….albatross around the neck.
Bill, I think you’re right about baby boomers maybe being at the tipping point in buying homes. We’re going to see huge amounts of inventory on the market when they begin moving into retirement communities.
The tipping point will not be boomers moving into retirement communities, the tipping point will be boomers staying right where they are working until 75, because they can’t afford to retire. No one will be buying any of these retirement homes, because they have no equity in their primary home to use. A lot of boomers will be trying to sell, because they can’t afford the mortgage, but no one will be buying because of the glut.
“In Floral Park, a foreclosed house went on the market down the street from Joe Rodriguez. It sold recently for just more than $263,000. As a result, Rodriguez is worried that he could have a hard time getting his $369,900 asking price, even though his four-bedroom corner property is bigger and includes a pool table as an incentive.”
$100k pool table? BWAHAHAHAHAHAHA!
“…It sold recently for just more than $263,000. As a result, Rodriguez is worried that he could have a hard time getting his $369,900 asking price, even though his four-bedroom corner property is bigger and includes a pool table as an incentive.”
Daaaaaamn! Did he say POOL TABLE?!? Now THATS classy- hell, I’d pay $370,000 for the pool table alone. How much does he want for the cues? I might be able to take out a 2nd mortgage for those.
He can burn that pool table for heat.
Maybe he expects someone to buy the pool table for $369,000 and he will throw in the POS for free.
I use to sell pool cues, some of them went for 15k more a work of art than a cue from Joss West and others. Yes, and some were over 20k and this was in the early 90’s, I can only imagine what they go for now.
Floral Park? $370K? He’s got to be kidding. This is an area in the unincorporated county between I-95 and Congress Avenue west of Lantana. They jst paved some of the streets last year. Some of the area is 900 sf boxes on a slab, but for $10K back in the 60’s. Mostly little lots. He’s got to be kidding
Yea I was thinking the same thing. When this all plays out 100,000 will be the high end.
We just sold our home in Melbourne,FL after 4 months on the market. We hired a realtor old enough to have seen down markets and understood how tough times are. Luckily we had owned the home 10 years and never refinanced. The realtor understood our desire to be agressive and our goal to be gone by hurricane season. We started out below the competition and cut our price twice, 10% each time within 90 days. From listing to closing, we were out in 160 days. Another owner in our neighborhood was as agressive and sold as well. Other homes are still sitting on the market a year after listing, reducing prices 2 or 3% at a time, even ones with substantial equity. There are buyers out there, but not at the price most homes are still listed at. A brutal time is still ahead.
Congratulations, well done.
I wish I had been able to stay in Florida and kept my first home - brand spanking new 3/2 on a quarter acre fenced lot. $73K in 1991. I wish I could have kepts my GA home - older 4/2 with basement on an acre with creek running through it. 99K in 1996. I wish I could have kept my third home in Orlando - 4/2 split plan/pool/with pool overlooking a preserve - $230K 2001.
And I thought a quarter of a million for that house was too much!
Congrats on being aggressive and being smart about how to get out.
I wonder if the window for getting out by being aggressive is closing. As more people begin to realize that prices are not only dropping but may (most likely will) continue to drop quite a lot and for some time to come and credit continues to tighten, will being aggressive on pricing be enough? Buyers are already in short supply. Continue to shrink the buyer pool and this fall and winter could really get ugly for anyone trying to sell.
If anyone in Briny Breezes took the money and ran when the now-defunct deal was announced, we should add them to the HBB Hall of Fame.
Check the sun-sentinel.com, Marge Dewry has 3 properties in Delaware, 3 properties in Maryland, and one condo in Delray Beach. She was hoping that the $1 million will pay off the mortgages.
http://www.sun-sentinel.com/news/local/palmbeach/sfl-flpdwyer10731pnjul31,0,4886745.story?coll=sofla_tab01_layout
I’m more thinking of trailer residents who I am sure were bombarded by ’smart’ arbitrage offers for their park lots. Surely some of them just said ‘Yup’, took the offer, and upped and went on their way rejoicing. (Especially now.)
Reading the articles, it sounds like a more common response was to go out and buy more property and take on more debt.
“I’m mortgaged up to my eyeballs,” Dwyer said. “I’m going to have to start selling [my properties] off just to survive.”
“Somebody please help her!” LOL
“I’m mortgaged up to my eyeballs,” Dwyer said.
And as Dr. Phil would say, “How is that working for you?”
Did anyone (besides a few idiots) ever think the Briny Breezes deal would ever go through?
NO
It’s always a big, stupid deal that signals the top. Briny Breezes 2006 = AOL Time Warner 2000
As a matter of fact, I know one of the residents, and just 2 months ago he told me that “of course it will go through, they have a contract” after I said that, perhaps, he should not spend the money before it was in the bank.
He truly, truly, thought there was nothing wrong with getting 1 million for his mobile home. He thought I was stupid, for, like, not knowing there was a contract and all. *duh*
/sarcasm
I should add that this person is an otherwise normal, smart guy. Not prone to get rich schemes, etc. I think he was just swept up in the group thinking. As the saying goes, the kool-aid was strong, and everyone said real estate only goes up.
I thought I would repost this here since my original post was at the end of an old thread.
There has been a lot of discussion about buying and holding gold. While I am not interested in converting most of my cash to PM, I think it is a good diversification strategy. Anyone have any recommendations on how to best go about it. Bullion vs Coins.. Best places to purchase, things not to do, etc.
Any thoughts as to how gold will be affected as credit contracts and the market struggles?
Any insights are appreciated.
I’m tempted to reply, but aladinsane’s the expert.
YO, ALADINSANE!
p.s.: Ignore Brad.
yeah, where is aladinsane, anyway? I miss his poetry/song lines
I miss them, too. They added an elegant touch to the blog.
Back from another sojurn into the High Sierra…
Saw a marmot get foreclosed on~
An eagle was flying overhead, with the unfortunate beast in it’s talons, screaming…
An awesome sight~
Saw a hawk once with a snake. Glad I’m higher on the food chain.
Edgar, I maintain between 5% and 10% of my net worth in precious metal bullion coins. I stopped buying silver in 2000 since I ran out of space to store it
I am not worried about government confiscation of precious metals. There are too few people in the United States owning too little of the precious metals anyway. I do keep the precious metals in safe places that are not where I live.
I recommend patience and buying a little at a time. In 1993 when Doug Casey wrote “Crisis Investing for the rest of the 1990s,” he was recommending gold. He was right. It was a great time to buy metals in the 90s. I bought a little at a time and was kind of worried that it was too little too late. Turned out I was wrong to be worried. So you should buy a little at a time. I recommend you hedge against precious metal prices falling by buying T-bills and savings bonds.
If you do not like to physically hold precious metals, I highly recommend the Permanent Portfolio mutual fund - trading symbol prpfx. It is risk-neutral because it balances out its precious metals investment with the opposite: Treasury notes and Swiss government securities. It comes closest to the one chapter in Casey’s book on wealth preservation. He recommended a similar mixture to hedge against both inflation and deflation.
To find a dealer in bullion, go to http://www.usmint.gov - they have a link to dealers in or near the state where you live. I go to two different dealers listed in that link. One of them is very reputable and a big coin dealer. The other one is a small dealer.
If you buy amounts of less than $10,000 you won’t have to fill out any paperwork to register with the government. And you can buy in cash at many places.
Lately metals seem to be correlated with stocks, but the dips are lower in metals than the stock dips. Keep a watch on interest rates. If they stay flat, gold will stay in the $650 range. But note a lot of the bills are going to have to be paid up ahead (medicare, boomer entitlements, peak oil). So inflation pressure will certainly support precious metals.
Did you check Ben’s metals blog?
I prefer bars to coins because there is a smaller premium. Your local dealer will charge you sales tax, but internet dealers will not. Take a look at silver, also. Average in over time when you think the price is attractive.
Any thoughts as to how gold will be affected as credit contracts and the market struggles? Not sure which market you mean; PM’s are the anti-fiat. As confidence in paper money erodes, PM’s will rise. Physical gold is no ones’ liability and IMO that will be very important.
Buy bullion coins, as the markup is insignificant compared to “collectible” coins. Believe it or not, you can get good deals by buying on ebay. Watch the auctions for awhile to get the hang of it. When prices dip, bid on bullion coins whose auctions end soon -bidders back off when prices drop. When prices rise, they pile on. Austrian 1 and four ducats, and krugerrands carry the smallest premiums. But the same coin can go for wildly different prices, as unknowledgeable buyers buy on ebay too. You’ll see this if you watch the auctions.
Silver…. bullion bars.
There is less silver around now than gold, and industrial use is expanding fast with its antibacterial properties, use in plamsa screens and electronics.
A nice 10oz bar is about $130 and you can always collect the 100oz ones if you are flush.
Paying almost $700 for one ounce of gold seems just wrong.
1967: 1 troy ounce of gold buys around 115 gallons of gasoline
2007: 1 troy ounce of gold buys around 220 gallons of gasoline
1967: 1 troy ounce of silver buys 4 gallons of gasoline
2007: 1 troy ounce of silver buys 4 gallons of gasoline
Edgar, et al…
The way the game has to be played, is strictly holding physical, no suppose-itories (suppose your gold they are holding, is there?) are going to work for this gig.
Bars trade easily enough, but they would only represent perhaps 5% of the gold traded, so coins are a better gig and they are easier to buy and sell, than ingots.
More than likely you’ll get pitched to buy rare numismatic coins, this is a NO GO, as they are collectibles, not bullion.
Stick with tried and true Gold Coins
Old school: Mexico 50 Pesos, British Sovereigns, Austria 100 Corona/100 Korona, 1 Ducats, 4 Ducats
New school: American Eagles, Canada Maple Leafs, China Pandas, South African Krugerrands, 1/20th through 1 troy oz sizes
Who to buy from?
There are plenty of reputable companies that have traded metal for decades, google any prospects to see how they rate.
Buying bullion on eBay is not for beginners…
It occurs to me that there are three sources which could drop housing prices significantly: 1) builders could give up and drop prices - they have the leeway on older projects, not so much margin on more recent projects; 2) homeowners who were not engaged in the mania can put their older properties on the market at significant reductions from current prices and still show a profit; and 3) bank REO departments can mark their assets down to liquidate them.
To date, none of this seems to be happening to any great extent. Builders have provided a lot of perks and concessions, but they have not really lowered prices much. The bank REO departments absolutely refuse to lower their prices to move the properties. I suppose at least some portion of the market consists of older, non-mania owners who need to move, cash in, or whatever, but it does not appear to be lowering prices to any great extent. My question: why?
The only causation which I can see is sheer blind greed. So long as there is at least one Greater Fool still buying at the current price, nobody will budge. They will all fight tooth and nail to get that GF to buy their house, then keep looking for just one more GF. I think this blind optimism that salvation is just around the corner will persist until there is no more room to manuver at all, until a really serious crash occurs.
You missed Speculords (2nd/3rd home flippers turned landlords). I am convinced these guys are driven more by their egos than common sense. When they start seeing themselves as idiots within their peer groups, prices will fall.
Right now they don’t mind writing checks to cover the financial cost of their mistakes. However, when everyone agrees RE investing was a really friggin dumb idea, they will fold. The ego cost is not something they can cover with a check. As a result, they will sell at any price.
This is the best post I’ve seen on here in 6 months. I’d like to see more analysis of why/how prices can fall from the lofty heights.
KIA’s contributions are always good, and mrktMaven FL also had an insightful analysis of the specu-lord impact.
This blog’s not just 24-7 fun and games …!
The only guess I have about why the banks start off with a higher price with the REO’s is that they have a duty to get the highest price possible for their stockholders/bagholders . If the banks were to just dump right now they would be accused of not at least attempting to get market value . They have to be concerned about destroying neighborhoods with a dump property approach .They also have to be concerned about lawsuits involving claims that they dumped the property to easy and caused the foreclosed borrower a undue higher 1099 tax bill .This is going to be a big mess .
Wiz — I fear that the ever-interfering government will soon enough consider a bill that will “temporarily” suspend the treatment of forgiven debt, owed by FBs, as income. Some pap to the masses. Explained away by the same folks who have explained away all of our “wars.”
All of this “boom” was just smoke and mirrors, now comes the reality. Lifestyles are going to change and sooner rather than later. Boomers aren’t the wealthy group most would like to have you think, most do not have any plans for retirement, they just keep on working. Being a boomer I never thought that all the attributes that they supposedly had were valid. That was more smoke and mirrors, and now the so called prosperity that was to be had is gone. The new paradigm is going to be hard to adjust to for folks addicted to consumption. Minimalist might be the new mantra for boomers. Or homelessness as the new in thing. Living with in your means has always been available, and will be again sooner rather than later. Of course, if your credit and assets don’t exist then the game is changed.
has anyone noticed this is second day American Home Mortgage has stopped trading?
Chances of BK and de-listing grow with each hour.
‘The market was red-hot when we started this, but it folded up before we could close it out.’
Translation: “We couldn’t get the suckers into there fast enough. Maybe next time.”
It’s my belief that when a nation reaches a majority of citizens who take from the system, rather than contribute, it is doomed.
I think we passed that point in the 90’s.
The Mexicans are coming! The Mexicans are coming!
Relax, have a tongue taco and a margarita. You’ll be okay.
SuzyQ
“The Mexicans are coming! The Mexicans are coming! ”
… ?!!??!
Was that comment a reply to mine about ciizens taking more than giving? If so, I never said or implied anything about Mexicans.
My comment was a “nation’s citizens “, but to be more precise perhaps the better term is “residents”.
Ask not what your Country can do for you ,but what you can do for your Country . ……. JFK quote
“As a result, neighbors trying to sell their wood-frame homes built in the early 1980s could have a hard time getting their asking prices”
Pray for a big bad hurricane, baby. Any frame house built in Florida post-1970 and pre-Andrew is ready to blow down. We rode out Andrew in a 1400 sf concrete/tile roof box built in 1958, while the frame and stucco crapboxes a mile away were -leveled-.
I don’t understand how you could build a stucco house in Florida. Doesn’t the humidity cause major problems? I would think that a stucco box from the 1970s would have withered away by now.
The stucco is just texture sprayed onto cinderblock construction. If you use a stucco veneer on wood frame construction in a high precip area like the Gulf coast you will have massive water damage within a few years effectively totalling your home.
I live in an apartment complex with stucco covering wood frames. It’s true - water pours in through the walls during a rain. Last year they went through to eliminate a lot of rot, and ended up rebuilding half of the complex.
Of course I don’t care since I’m a renter, but the place has 10 years left before it’s junk.
Actually it’s a cinder block house with “stucco” covering on the walls. Newest building codes require lots of rebar in the walls, running from the foundation up to the top of the wall to attach the roof trusses. Should be able to withstand anything short of a CAT 5.
But with the power off for maybe a month, and maybe a year to get the damaged shingles replaced, you’ll have a serious mold problem after that CAT 3 or CAT 4 blows through.
for some pictures of stick built houses after Andrew. I know these neighborhoods and almost all went up in the ’80s. There are communities all of S Fl (especially Broward) full of this construction, sitting ducks for the next cat 5.
I’m a native — don’t know any other native Floridians who would consider buying a stick (as opposed to concrete block) house *except* those who want an old one because they love old-timey/historical stuff more than they do safety and durability. The old stick houses that last all are built up off the ground and almost always sit on top of a low-height concrete-block base. It serves as a reasonable termite barrier. New stick homes usually count on what is called a “stucco-cut” to keep termites out — a rise from the ground that angles outward at about 45 degrees for a few inches before the vertical wall extends upward. It isn’t, or at least wasn’t, mandatory and I’ve seen contemporary stucco-clad stick houses without it — just waiting for those little wood-munchers to ring the dinner bell.
‘Payment shock recently hit Rene Asor, who lives in Key West. Caught unaware, his monthly payment soared from $2,400 to $3,799′
Alex Veiga of The Associated Press, maybe next time you could go into a little more detail on how this guy was “caught unaware”?
Was it “I was crossing the street, minding my own business, when this loan reset comes plowing down the street and hits me. It was coming right for me!”?
“I knew I should never have gone straight from a 12-hour binge at Sloppy Joe’s and The Hog’s Breath to my closing”, said Rene. “I couldn’t even focus on what I was signing with the room spinning like that.”
‘I am now out close to $90,000 for a lot that was never cleared — I don’t think anyone ever even walked on it.’
“…including myself. Uhhh, wait, don’t print that part.”
We’ve been hearing more and more stories about banks/lenders releasing draws without verification of construction. I’d like to know how this was done other than outright fraud & collusion on the part of the lender. Every home I’ve ever built I’ve been put through the ringer when I call for a draw.
Fraud and collusion? Absolutely.
“We’ve been hearing more and more stories about banks/lenders releasing draws without verification of construction.”
That seems to have happened in at least one of the high-end ($1.5M - $3M) spec developments here on the central coast. All I can do is shake my head and say “amazing”. Talk about loose credit and liquidity sloshing about…it was almost like they were throwing it at some people.
Also ,the builders were getting way to much financing on these developments . In other words , the builders didn’t have enough skin in the game either in this easy money lending cycle . The builders sought to get pre-constructions sales contracts in order to get the banks to fund everything . Than when you get a 50% cancellation rate a builder ends up with standing inventory that can’t sell at the projections the construction loan was based on .
Also many builders and investment companies got borrowers to be the investors for taking out the construction loans so those builders would not have to put up anything and have limited liability .In other words ,the builder sold the investor/home buyer the land and contracted to build the property .It gets really bad when the contractor draws money against the buyers construction loan and than doesn’t perform or doesn’t pay their sub-contractors .
“‘Our sales were good in the beginning, but it got bad, bad, bad and then even worse,’ said Barry Greer, an owner of The Lexington at Orlando CityPlace….”
What! I’m stunned. CONdo-hotels sales crashed. That’s unbelievable!
Indeed, no one saw THAT coming, eh?
‘Eighty-five percent of the buyers were relying on second mortgages to buy their units, and that is gone. The mad money is gone from the market.’”
“85%” were taking out 2nd mortgages to finance their 2nd property. I’m astounded that there’s that many stupid people out there that would risk their primary resisdence to buy a 2nd place.
“The Briny Breezes sale is off. Ocean Land Developers sent certified documents this morning telling the corporate board the deal to buy the mobile home park for $510 million and convert it to a resort had fallen through, Ocean Land VP Logan Pierson said.”
Those greedy trailer home owners should have taken the money and ran. Instead they acted insulted and demanded more money. Now they will die before getting a chance to live in paradise.
Capitalism is driven by greed. So, what is your problem?
Capitalism is driven by greed. So, what is your problem?
Greed often is linked to illegal business activities.
what is your problem?
None, when your rights are read and you are hauled away in handcuffs and now face prison time.
Oh F&&k me and call me homeless.
Those old folks ARE LIVING IN PARADISE already!
How’s are your folks living?
pass. the rx for herpes & restraining order would kill the thrill !
“Rodriguez is worried that he could have a hard time getting his $369,900 asking price, even though his four-bedroom corner property is bigger and includes a pool table as an incentive.”
Bwaahahaha! I think when it’s time to sell my car I’ll hang one of those pine tree air fresheners in it and ask for another hundred bucks - because hey - it’s got an air freshener as an incentive!
No, to emulate Joe R., you should ask for ten thousand dollars for the air freshener…
Forgive me if this is a dupe, I tried posting but I may have quoted too much. Long story short, New Orleans RE is now toast…
http://blog.nola.com/updates/2007/07/increased_property_assessments.html
“Among the disgruntled was Freddie Guess, an artist and gallery owner who just received word that the valuation on his Garden District home had jumped from $267,500, the price he paid for it in 2001, to $780,000.
“My income has dropped from my gallery, and now I must pay a $10,000 increase in city property tax,”
This is just what New Orleans needs, a massive increase in taxes [/sarcasm]
That’s just the beginning. For all those here who like to joke about a general revolt, soup-lines, “blood in the streets”, etc, keep your eyes on South Louisiana. It will begin here, soon, and I’m not even joking.
It’s beginning to look like those who never came back are the smart ones.
Beginning? Sentiment was always the only reason to return, and we all know that’s not economic.
“The market was red-hot when we started this, but it folded up before we could close it out.’”
“‘There is essentially no condo-hotel market left this year,”
What he means is that he expected to get his money and run before the fools who bought condo-hotels realized it was nothing but time shares with them holding the bag for 52 weeks of the year instead of just one or two weeks. If he could have found a few more fools he would be sitting pretty.
http://money.cnn.com/2007/07/31/real_estate/bc.usa.economy.homes.index.reut/index.htm?cnn=yes
Home prices continued slide in May
This marks the 18th consecutive decline in the growth rate, according to an index of major cities.
From PMI’s news release this morning:
“U.S. Mortgage Insurance Operations
Total incurred losses in the second quarter of 2007 were $134.4 million compared with $64.2 million in the second quarter of 2006 driven by an increase in the number of notices of default, larger claim sizes and increased claim rates.”
Insurance in force at the end of the second quarter of 2007 was $111.7 billion…. so there’s still room for the losses to grow….
Need opinion from some of you in Palm Beach Garden.
While looking for property in Mirasol in Palm Beach Gardens Fl I came across what could be a classic case of the wannabe/flipper real estate mogul.
I was looking at this house http://www.mirasolproperty.com/listing_sheet/R2791236 (112 Dalena Way in Mirasol, Palm Beach Gardens, Fl) and searched the land recordsand found this person purchased three houses in Mirasol.
Property 1
Purchased 7/04 for 541,714 1st Mortgage 333,000 5.25% 2nd Mort 199,000 (line of credit) Bank filed foreclosure notice July 19, 2007. Can’t find the listing but from similar houses probably trying to be sold for around $700,00 - $800,000.
Property 2
Purchased 7/06 for 928,132 1st Mortgage $742,505 fixed rate. Bank filed foreclosure notice July 19, 2007. Property was sold for $825,000 this week. Estimated loss after selling expenses at least $150,000 plus carrying costs for the last year.
Property 3 (see link link above) and this is the house I am interested in.
Purchased 8/06 for $773,165 1st Mortgage $695,848 10 3/8% 2 year arm (can you say subprime). Mortgage payment is $7,000 per month, add in taxes, insurance, and HOA and is probably over $9,000 per month. Bank filed foreclosure notice July 19, 2007. Currently listed for $699,000.
There appears to be a decent number of empty houses on the street and there is no way this house is worth $700,000. I was thinking about offering $350K - $400,000. Should I make the offer directly to the bank or try to work with the agent on a short sale or am I just wasting my time making an offering that much below the asking price. Can anyone give me their two cents.
Thanks.
Michael
How many of those houses will remain empty? How many more will join them? Do you really want to live next door to a shooting gallery or multi-family squatter house?
This is not a shooting gallery or multi squatter neighborhood but a gated two golf course country club community with houses priced currently from $600,000 to $4 million. They would have to pay between $50,000 and $100,000 to purchase a equity membership in the country club. Not going to happen.
Country clubs go broke in Florida all the time. See Binks Forest in Wellington.
This one is not going broke. However, some investors may and will be foreclosed on.
I think you’re probably wasting your time. While the market is bad, I don’t think it’s gotten to the point yet where banks will commonly take a 50% of list price offer. There’s still too much denial that homes are overpriced for that to float this early in the market decline.
If it’s listed with an agent, the bank probably will tell you to go thru them.
I have read this blog for a month and it has been very enlightening regarding the housing market. Most of you seem to believe that things are only going to get worse with foreclosures, credit and other housing related matters. What baffles me is that while I completely agree with the overall sentiments of this blog, why is consumer confidence at a six year high http://tinyurl.com/22hp9f, why has the market gone down only two days in a month (at least that what it seems like), why is government reported inflation tame, why are jobs numbers positive, etc? There seems to be a huge disconnect from housing to the overall economy. How can such rotten housing numbers not affect the market? You all seem to have a handle on all the lousy economic numbers that are likely to transpire in the future, but the reality seems to be that the market and economy are just fine and to hell with the bad housing numbers. What gives? Thanks for all the timely info and entertaining chat.
Remember a couple months ago according to the press, there were no bad housing numbers. Everything was rosy. Only believe about a quarter of what you read.
well, Bizarro ….
Not speaking for others but as for myself …after you get bitchslapped by reality, sideswipped by the govt, and trampled by a horde of bill collectors due to past circumstances, I now pay VERY VERY close attn to my world because I have children & others who depend upon my making the very best judgement in life’s arena.
I try to learn from past mistakes so as not to repeat them, and this blog is a dose of truth serum we all share like a water bong, bubbling our way thru the housing bubble.
Not trying to be flippant .. my soh is .. ‘ unique ‘ to say the least … hopefully just gave a version of an answer & maybe a smile to yer face!
bizaroworld…
Like your moniker, what used to pass for reality, doesn’t anymore~
Sorry.
“…why is consumer confidence at a six year high…” etc.
It might be because unlike you, who better-late-than-never found Ben’s blog, the great majority of those people haven’t and therefore are relatively clueless and generally confused. As the home ATM shuts down, that consumer confidence should decline. Seems like mid-late Fall should bring some signs of that. All IMO, of course.
From Reuters
Another several hundred million dollar subprime hedgie fund by a place in New York M-GIC being written down or off.
http://www.reuters.com/article/marketsNews/idUKN3044635320070731?rpc=44
They should start falling like tombstones soon.
we might be near a bottom - a skanky one at that
http://news.yahoo.com/s/ap/20070731/ap_on_en_tv/people_paris_hilton
“As Florida’s housing boom rolled along, Michael Wood read investment books and went to weekend real estate seminars to learn how to cash in. At the seminars, he was approached frequently by mortgage brokers offering loans to help him build a home and flip it.”
RE Investing 101 Mistakes:
1. Attending weekend real estate seminars by the industry that has no interest in you except your money.
2. Reading investment books such as the one by the former NAR chief economist on why realestate will never fall. Advice that supports the industries best interest, not yours.
3. Being wowed by mortgage brokers offering loans by commision only brokers who only have their own interests in mind, not yours.
I wonder if ol’ Mike Wood still gets invited over to Sunday dinner? With the seven or eight family members he ‘got into this deal.’
““In early 2005, Wood signed up to build not one, but two homes, both in North Port. He had so much confidence in his friend that he let him handle everything from choosing the lots to the building plans. He took on more than $400,000 in debt and even started convincing his friends and family to sign up. ‘I’ve got seven or eight family members in this deal,’ Wood says.”
Why just flip one?
I can see no problems with this plan…solid!
How come he didn’t ask “if its such a good way to make money, why aren’t the brokers, builders, appraisrs doing it too?”
OT, from Bloomberg, a prediction that half of all hedge funds will close within five years.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZdtk8hhjZr4&refer=home
Is that really news? It seems to me the funds are high risk gambles, with half making big returns and half losing everything. In the end, you probably end up with a somewhat below average return, due to the higher fees, if you own a little of a lot of them. If you put most of your money in one of them, well, “sophisticated investors” should know the possible consequences.
Hey, at least out in Vegas they give the high rollers free drinks.
Two former goldilocks cheerleaders expressed new sentiment this weekend. One, who scoffed dismissively at the Zillow Zestimate we looked up (”Oh, Pfft, it’s worth WAY more than that.”) was saying how overpriced Utah has become and how next year it’s going to get really bad. I asked her to clarify, as to her “bad” means housing bust, but to me, “bad” means things getting more overpriced. She meant the first one. The koolaid is wearing off.
The second, is a guy who chirped that Utah Is Different for the past six months. Now, he’s griping that the house up the road from him is way nicer, but priced way less than he bought his for…and isn’t selling. Two months ago he was saying that we still had up up up to go. Of course he’s predicting that our turnaround will be in a year and he’ll get his equity back. I felt kinda bad for him so I just let it go.
But I did remind him that Utah is not cut out to absorb a 30-40% hike the way more financially savvy communities are. We’re not exactly known for being good with credit here. Bankruptcy is like a rite of passage. Anyway, it’s just interesting to read this stuff on Cali, knowign that in a year or 3 we’ll be reading this in the Salt Lake Tribune.
Try in 6 months or sooner. SLC is already starting to tank, has been for two months.
“Ron Sheffield, president of Esslinger-Wooten-Maxwell Realtors, told NBC6, ‘If half your neighborhood is in foreclosure, half your condominium buildings in foreclosure, that will certainly impact your value.’”
Shuffield is the guy who two years ago talked about a “new paradigm” for Miami real estate. I guess he found the pardigm–falling values.
Yeah, he was the one who said South Florida or Miami was working off a completely new economic model. BWAHAHAHAHA!