A Buyer’s Market Without Buyers In Florida
The Wall Street Journal reports on Florida. “Investors played a big role in pumping up home prices during the housing boom. Now, they account for an outsize proportion of loan defaults, mortgage bankers and builders say. Sazzad Khandakar is among the nation’s distressed home investors. In early 2005, he bought a $410,000 condominium and a $390,000 newly built single-family home, both in Orlando, Fla.”
“‘Everybody around me bought an investment home in Florida,’ Mr. Khandakar said. ‘Florida was all over the news; my friends were doing it….I didn’t want to miss out.’”
“He planned to keep the condo as a second home and sell the detached house for a quick profit. For the condo, Mr. Khandakar made a 10% down payment, but he borrowed 100% of the cost of the house, assuming that its rapid price appreciation would soon provide him with equity.”
“Instead, prices began falling, and he has been unable to sell the home or find a tenant. Now, Mr. Khandakar said, he is behind on both loans. ‘My credit is shot for the next six or seven years,’ he said, and he has run through $100,000 of retirement savings. ‘It will take me another five to 10 years to recover that,’ he added.”
“Many home builders say they tried to rein in sales to investors. Dom Cecere, chief financial officer of KB Home said…many investors bought anyway. ‘People do infiltrate whether you like it or not,’ he said.”
“‘For a while it went their way, they bought two or three homes and continued to roll the dice,’ said Mr. Cecere. ‘But that goes the other way when the prices go down.’”
“In the end, some investors may have made money by flipping a series of houses, and lost out only on their last investment, which they couldn’t sell before the market collapsed, Mr. Cecere said.”
The Orlando Sentinel. “Realtors say the market has become even more frustrating in recent weeks, though, as lenders have tightened credit standards, making it tougher for everyone to get a home loan, regardless of income.”
“It is particularly tough now for first-time home-buyers at the lower end of the price scale and for borrowers looking for ‘jumbo’ loans of more than $417,000, said Roseann Lutz, broker agent (who) specializes in the Four Corners area west of Walt Disney World.”
“‘Those are the ones they had the most trouble with,’ she said. ‘The biggest challenge is getting a buyer qualified for a loan,’ because lenders are now ‘being particular about who they give loans to.’”
“Aside from that, she said, many potential home buyers are still on the sidelines, not even looking at homes, while would-be home sellers continue to flood the market with properties, seemingly oblivious to the slowdown and hoping to cash in on the past five years’ worth of paper gains.”
“‘For every one sale we make, we’re getting 12 listings,’ Lutz said. ‘It’s just been really, really hard.’”
“Home builders are slashing prices on new properties because of the record slump in that market, and many existing-home sellers who have equity to work with are having to slash their asking prices, too, in an attempt to attract interest.”
“So far, Lutz said, the late-summer market is stagnant despite all that. ‘The phone is just not ringing.’”
The Herald Tribune. “Paradise Development Group hoped to ride the region’s frenzied condo wave to the edge of downtown Sarasota when it bought the offices of the Kirk Pinkerton law firm in August 2005.”
“Paradise envisioned a $35 million mix of retail space and more than two dozen high-end residences, priced at about $1 million each. Two years later, and after the collapse of the area’s condominium market, Paradise has pulled the plug and is offering the building for sale.”
“Similar scenes are playing out throughout the region and Florida: Developers who had hoped to capitalize on low interest rates and perceived demand are having to reconfigure, stall or abandon projects altogether. In Sarasota alone, roughly a dozen condo developments have either been shelved, revamped or put back on the market.”
“‘It’s simple. Our market is in a coma,’ said Debra Garrett, an agent in Sarasota. ‘There are too many condos, not enough buyers, and too many speculators. We’re seeing a correction now from overinflated prices, caused because people thought price increases would never stop — and they did stop.’”
“‘It was a knee-jerk reaction around the country,’ said John Harshman, president of a leading Sarasota commercial real estate brokerage firm. ‘From 2002 to 2005, developers looked at practically every site downtown and around it as a residential site.’”
“When Jeff Bacon opened the Drexel Heritage Store in Sarasota two years ago, business could not have been better. Customers were feeling rich on real estate and were buying the exclusive line to redecorate their homes.”
“But after six months, Bacon noticed a distinct change. Sales were starting to slide. Early on, he blamed the back-to-back hyperactive hurricane seasons. But as real estate continued its long slide, Bacon found his sales following the same disturbing line.”
“After long-suffering Realtors, the business people who are perhaps smarting most from plummeting home sales, furniture stores might be the next best litmus test for the fortunes of the real estate market.”
“Furniture sales in Florida have tumbled far off their housing-boom highs: sales statewide climbed 27 percent, from $9 billion in 2003-04 to $11.5 billion in 2005-06. By summer 2006, they were down 16 percent from that peak.”
“‘It’s bad across the board,’ says Michael P. Niemira, chief economist and director of research for the International Council of Shopping Centers. ‘It’s severe, it’s long and it’s not going away anytime soon. As a business cycle, we’re living with the boom-bust part of that market.’”
“Lennar Corp., the big Miami home builder that reported a $255 million loss in the most recent quarter, has trimmed more than 60 additional positions from its Southwest Florida division, bringing it to its pre-housing-boom levels, an executive said.”
“The cuts this week included Rob Allegra, the division president of Lennar Sarasota/Manatee, who has been the face of the home builder locally for more than a decade.”
“The problems at Lennar reflect the general housing market malaise. Other big builders in Southwest Florida have been cutting staffs, but experts said that companies with national exposure have been hit harder.”
“‘The home building inventory readjustment is mostly at the lower end because of all the extra sub-prime homes and all the speculative homes sold in the $250,000 to $400,000 price range, and I think it will affect the national builders more than the local builders,’ said Pat Neal, president of Lakewood Ranch-based Neal Communities.”
“‘Market conditions have eroded so much over the past six months that we are now focused on limiting the loss for the year,’ said CEO Stuart Miller, adding later that uncertain conditions made him ’suspect that we will not know that a recovery is coming until it is upon us.’”
“Vultures have been circling over the slumping Southwest Florida real estate market for a while, but few have descended to snatch properties from increasingly desperate builders and developers — until now.”
“Documents obtained by the Herald-Tribune show that Joseph L. Long, a little-known, New Jersey-based real estate investor, is negotiating with about 60 area developers and builders to buy 1,500 homes and condos at a 30 percent discount to their current list prices.”
“If Long, who has never done anything of this magnitude before, is successful in lining up the $700 million needed to pull off the deal — a very big if — it could have market-shaking consequences.”
“‘I’m extremely skeptical about a guy with no track record who doesn’t have financing in place,’ said George Huhn, a Venice real estate agent and foreclosure specialist. ‘If he thinks he’s going to get money from a hedge fund, I’ve got news for him: The liquidity out there is zero. The mortgage crisis has taken all the liquidity out of the market, and no one is sure what is going to happen.’”
“Huhn added that the smart money, the real vulture money, is waiting for banks to seize properties from developers and builders.”
“‘They don’t want to buy property for 70 cents on the dollar,’ Huhn said. ‘They want to buy for 25 to 30 cents on the dollar. They really want to feed on the dead carcass,’ Huhn said.”
The Scripps Howard News Service. “America’s housing market has gone from robust to just plain bust in the past 18 months. These are the times that try the skills of real estate professionals, says Jim Crawford, a real estate coach in Atlanta.”
“‘It’s a buyer’s market without buyers,’ he says. ‘Of the top 40 markets, 36 are down. In Atlanta at this time of year, we should have a maximum of 52,000 homes for sale; we have 114,000. What’s happened is, if you can’t sell in Chicago, you can’t buy in Atlanta. If you can’t sell in Boston, you can’t buy in Florida.’”
Ben,
Can we have a thread on Bush/Ben’s brilliant bailout idea?
Thanks.
Anyone have a link to the details of this deal? I am watching CNBC int the background today, but I would like to see it all on paper.
Bailouts for overextended borrowers sounds great, I have a 20K car note that I would love the Fed to quash. Too bad it’s already at 2.9%, but hopefully they can help me, I was the victim of predadtory lending!!
I agree, I want to be bailed out of all of the money that I owe others. Mortgauge, car note ect. Its only fair. I too was also the victim of loan sharks!!!
Don’t be fooled. The government does not wan’t folks to walk away from their mega debt because it’s just not good for our economy. This is just one more attempt to kept the sheople in slavery. Any lending reform is just too little to late. If anything tighter lending standards will make the RE situation much worse. The is not a bailout fellow bloggers.
I think the “bailout”, when finished, will create a semi-permanent sub-class of home owners who are in houses worth $300 which have $500K / 50 year loans. They will be “semi-permanent” because they can never sell their home for what they owe on it.
The objective of all current bailout schemes is to keep recent buyers from defaulting. The only way to keep their payments at the same low levels is to streach out the length of the loan terms. The government’s role will be to prohibit excessive fees which could kill a re-finance, and put pressure on the lenders to to go out an additional 20 years. Maybe the govt will back up the last 20 years with some sort of inflation hedge.
Here’s the link to HeliBen’s speech:
http://www.federalreserve.gov/Boarddocs/speeches/2007/20070831/default.htm
After reading this, I am not sure that Bernake has a true understanding of his job, which is supposed to be assuring the safe & sound functioning of financial markets. He blames the current mortgage/credit woes on investors who did not make sure that proper underwriting was done by mortgage originators. Hello, is this not a responsiblity of the Fed’s Safety & Soundness Regulators ?
Also, my take on his speech is that he will lower interest rates, and that inflation is not now his primary concern.
“He blames the current mortgage/credit woes on investors who did not make sure that proper underwriting was done by mortgage originators. Hello, is this not a responsiblity of the Fed’s Safety & Soundness Regulators ?”
No. The Fed governs the banks. It doesn’t govern the hedge funds, bond funds, pension funds, insurance companies, etc, that bought the crap loans.
He would rather see 10% inflation than a collapse of the banking system. Greenspan put BB in a bad spot and I cannot criticize him too harshly for what he is doing. Who wants to be blamed for the Great Depression II
Bush was pretty specific in his speech that the government would NOT bail out or help speculators or those who overbought. I have not problem with the gov’t helping those who were victims of predatory lending and have been in their homes for years.
“Victims of predatory lending”? What, all 5 of them? Most of these whiners are greedheads who blew the refi or heloc cash living way above their means, thinking the equity escalator would never stop going up, up, up. Guess what, loans need to be paid back.
It’ll be like separating fly poop from pepper
…victims of predatory lending…
Nobody put a gun to the heads of these people demanding them to sign on the dotted line or else.
What will anything out of DC do about this?
‘Sazzad Khandakar is among the nation’s distressed home investors. In early 2005, he bought a $410,000 condominium and a $390,000 newly built single-family home, both in Orlando, Fla. ‘My credit is shot for the next six or seven years,’ he said, and he has run through $100,000 of retirement savings. ‘It will take me another five to 10 years to recover that,’ he added.’
‘Joseph L. Long…is negotiating with about 60 area developers and builders to buy 1,500 homes and condos at a 30 percent discount to their current list prices. If Long…is successful in lining up the $700 million needed to pull off the deal — a very big if — it could have market-shaking consequences.’
Nothing yet. My fear — the goverment will take the mortgages at, say, 90 cents on the dollar and try to split the losses with the FBs — and end up losing half that money. If the politicians start using the words “senior citizens” I’ll really be afraid for myself and my children.
I’d be more worried if the J6P was for mortgage bailouts. They seem to hate the idea thus far.
Politicians want bail out their finance buddies but when push comes to shove they will save their own skin first. They’ll come up with something extremely minor to have “done something” and let it drop.
I have no doubt the bailout will fail if you measure success as helping millions of people like the one you’ve described, however, it can still cost taxpayers billions of dollars as the federal government provides FHA loan guarantees on millions of loans that never should have been made. Bush is a hypocrit and a liar, and so is the Republican Party. They are no friend of free market economics, and should stop campaigning as such. The Republicans should become “Socialists”, and the Democrats should become “Communists”, then at least we’ll know who we’re voting for.
lainvestorgirl:
I hate to admit it, but you are right. How about “Dumb and Dumber” for the new names of the political parties?
How many months does Bush have left? I don;t think this is going to happen. Too big of a problem. All talk I say, All talk.
la inv girl, well said.
Do not underestimate the federal ability to **** things up. Here’s an example of an awful idea that will sound excellent in Washington:
A federal policy to procuring REO properties in an effort “correct” the “problem” with demand.
There’s no end to the potential catastrophic programs they could stick us with.
I think this will only add to the pressure on foreclsoures.
Lets see, I am David Crsip and I have 85 homes I am trying to sell and I don’t want a big 1099. NOw I can walk away and not give a $Hit. No 1099.. LET THE FORECLSOURE TSUNMAI WAVE # 2 commence!
I could not help to laugh at George Bush, whoo
Lets see FHA will refinance mortgages that only help those with stellar credit and income.
Where was the govt when my tech stocks were crashing?
I think it’s a red herring. It sucks either way, but I bet he is just trying to draw attention off the Mexican trucking deal that is supposed to start next week.
“Oo, Oo… look over here. Nothing to see there.”
But if this is indeed true, and they are going to bail the mofo’s out, then I have to ask myself. Does it really pay to be responsible anymore? I mean, seriously. What does this mean for people like us on the blog? Are we just screwed no matter what we do so we should just hop on the George Bush gravy train?!
I fell a bit nauseous today.
Hailey, you are not alone in your feelings today. When I heard this on the radio, I wanted to scream out in anger. There is no reason for Americans to act responsibly today. I hate what this country has become, and I am one who served it for 4 years as a Marine. We do need a Ron Paul revolution. ASAP. Like, yesterday.
Join your local Ron Paul 2008 Meetup.com group as soon as possible, and be a campaign volunteer, to get Ron Paul elected as President. You are witnessing the total destruction of our sovereign county unfold before your very eyes. Do it before it is too late.
No need to feel nauseous.
First — assume that the Fed and the federal government will not be passive actors during the mortgage meltdown. Politicians will not stand idly by appearing to do nothing while the residential real estate market slides and homeowners (voters) face catastrophe. Take it as a GIVEN that government will meddle in markets — then, after making malinvestments and hampering the market, it’ll use the ensuing crisis to further intervene. If you never forget this, you will not often be surprised.
Second — just because the Fed inflated its way into this problem, don’t assume that it can’t inflate its way out of it. Just because politicians can “do something” doesn’t mean that The Something will be helpful. The Something that the Fed/fed does will have further consequences, if it involves reinflation, bailouts or anything of the sort.
We need to “make book” with Fed/fed behavior. That’s a gambling term to describe how the house can win no matter how the bets go (over repeated bets). If the Fed thinks that it can re-inflate, then make book by “betting” against the dollar.
From this morning, I’m not sure I heard anything from Bush that suggests support for anything truly abysmal. Suggesting that debt forgiveness by banks not be federally taxed is probably not atrocious. And Bush did seem pretty emphatic (at least verbally) about not supporting direct bailouts. I’ll at least give him credit for that.
Jim, thanks for the rational discussion. It seems some HBBers are getting a bit overemotional.
George did not show the market the front door money today, which was a bit disappointing to the stock market, but they know the money is on the way, and is already being pumped in through the back door. The fed will open the front door money in a couple of weeks. This country needs a revolution.
There are 8 or 9 homes in my neighborhood that I am waiting to liberate the equity from. I need a new Hummer, Criss Craft, Harley, European vacation, and boob job for my wife. The sooner the congress passes the 1099 Loan Tax Forgiveness bill, the sooner I can start liberating all that equity for myself. The congress needs to get up off their butts and act now, and pass that bill. I am entitled to all the toys and things the the American dream can provide for me.
Exactly. Perfectly put. And then we wonder why the rest of the world hates us. Personal responsibility? Forget about it. It’s all about bread and circuses.
“I need a new Hummer, Criss Craft, Harley, European vacation, and boob job for my wife. The sooner the congress passes the 1099 Loan Tax Forgiveness bill, the sooner I can start liberating all that equity for myself. The congress needs to get up off their butts and act now, and pass that bill. I am entitled to all the toys and things the the American dream can provide for me.”
“‘It’s a buyer’s market without buyers,’ he says….”
Like the auto industry, the REIC sucked up future buyers using no money down gimmickry.
A very astute analogy. Correct!
I have to agree.
Even worse, the builders flooded “the lots” with inventory in anticipation of further growth “in demand.”
Building won’t stop. I believe job migration is greater than people realize. There is nothing wrong with wanting to own a home. We keep losing people to more affordable states… When the perception becomes more common…
Got popcorn?
Neil
But the Dow is currently up 136 points so everything must be working fine.
“After long-suffering Realtors, the business people who are perhaps smarting most from plummeting home sales, furniture stores might be the next best litmus test for the fortunes of the real estate market.”
- My favorite indicator is the line at the Lowes paint counter - now there isn’t one. Two years ago, you could not even push your cart past that area, as all the home flip remodelers were at it.
HD is dead - I even get a human checker
Earlier this year, I went to Home Depot on a weekend. Not one, but two, live human employees asked me if I needed any help. Never had THAT happen before.
No line at HD paingt dept the last two days. Place is dead.
“‘For a while it went their way, they bought two or three homes and continued to roll the dice,’ said Mr. Cecere. ‘But that goes the other way when the prices go down…In the end, some investors may have made money by flipping a series of houses, and lost out only on their last investment, which they couldn’t sell before the market collapsed, Mr. Cecere said.”
Lots of dot.commers made millions, or billions, by selling worthless stock and getting out. Only a few true believers who stuck around too long went to jail. I wonder if anyone, other than Blackstone, managed to sell to the last greater fool and get out this time.
Some did - they kept flipping but did only a couple serially. They would only lose money on the last two.
It was the Trump Juniors that doubled down and kept buying more and more that got into trouble.
Casual investors in the dot.com may have lost on a few thousand dollars. I admit I lost a few thousand. Did it hurt, yes. Did it ruin me? No. I can lose that in Vegas over the weekend. Gambling on 500K to 1MIL investments is way too risky. Oh yeah, I was able to sell my stocks in a dime. Not the same with housing investments. Dumb…
When the lender finances you 105% LTV, how is it risky?
“It is particularly tough now for first-time home-buyers at the lower end of the price scale and for borrowers looking for ‘jumbo’ loans of more than $417,000.”
Of course, in bubble markets these are one and the same.
“It is particularly tough now for first-time home-buyers at the lower end of the price scale and for borrowers looking for ‘jumbo’ loans of more than $417,000, said Roseyend Klutz
Hate to point out the obvious luv, but if both these groups are hurting (which agreed WT are one and the same) then who out there is having an easy time ???
Its like 50% of the buyers wont buy the other 50% cant find loans and the rest are buying the affordable properties
“Instead, prices began falling, and he has been unable to sell the home or find a tenant. Now, Mr. Khandakar said, he is behind on both loans. ‘My credit is shot for the next six or seven years,’ he said, and he has run through $100,000 of retirement savings. ‘It will take me another five to 10 years to recover that,’ he added.”
Exactly, it’ll take 10 years just to get back to square one, then another 10 years to try to save for some downsized retirement of sorts. Averaged out and factoring economic realities it spells 15+ year Greater Depression.
I’m not so sure it will mean a depression… instead, it is a way to keep the labor force engaged as the baby boomers start their retirement. Always lived for today? Great! Show up at work tomorrow. Here is your apron.
Got popcorn?
Neil
This is a dream come true for every member of Congress: No need to raise the age for SS eligibility if all the boomers have to keep working to pay for their follies of the last 30 years.
Whether by accident or design, the Congresscriters may have avoided a huge mess just by doing nothing.
You still collect Social Security, even if you are working.
But you are still paying in… so all of the additional work is more paid in.
What they don’t factor in is that if baby boomers keep working then you have more job competition and therefore higher unemployment. They would need to create jobs for all of these people.
Me thinks that if the gov tries to keep unemployment low they will have to do the hiring themselves and we will end up in a socialist / communist society.
Neil,
I am 40,my parents mid sixties. My parents retired 6 years ago. I remember growing up no new cars/hand me downs on clothes/parents who saved every extra penny and invested.
They can live VERY comfortably now.
Now the fun part. When the parents have get togethers it truly is amazing how many of thier friends who are from 60-80’s CAN’T afford to retire. Granted some work to get outta the house/away from hubby,wife etc. As a rough guess less than 20% can afford it. It really makes me think about what to do with my money so i don’t end up like em.
Another thing is the amount of 60+ people who heloc’d every penny out of a paid for home here in Florida,but thats a story for another day…..
Chris
I am spending the weekend near ft myers, too bad I will be too busy to torment the realtors…
“Huhn added that the smart money, the real vulture money, is waiting for banks to seize properties from developers and builders.”
“‘They don’t want to buy property for 70 cents on the dollar,’ Huhn said. ‘They want to buy for 25 to 30 cents on the dollar. They really want to feed on the dead carcass,’ Huhn said.”
Finally the media is talking about >50% decline in prices. If this kind of talk becomes acceptable in respectable circles, we will be in a good position. I believe there are many vultures frequenting this blog. I am patiently waiting to feed on the dead carcass.
Let them rot!
If the vultures buy the properties at 30 cents on the dollar they’ll try to get at least 45 cents at sale. In Florida, is there (will there be) a market for those properties even at 45 cents on the dollar? I don’t think buyers will be beating down the doors to buy at that price, at least not for the next few years.
Bill in Carolina,
I don’t know. I honestly think in my neck of the woods in Port Charlotte there is just to much inventory right now. I transferred here right after Charlie to help the parents. If you wanted a property under 100k,nothing other than horrible,run down trailers were available. Now ? Oh yea…300 plus under 100k. About half are SFR. I only need/want a small 2/1. Right now a 1/1 fully remodeled is listed for 49k. It’s a gonna get real interesting in the next year…
Chris
Cobradriver,
I remember Charlie quite well. It was headed right at Sarasota until it hung a right into Charlotte Harbor. Going down to Port Charlotte and Punta Gorda a full year later and still seeing blue tarps on so may roofs was what motivated us (me, really) to get out in 2005.
Here’s the math I did. A roof on an average house lasts about 15 years. That means about 7% of houses get new roofs in a given year. Add another 3% or so for new home construction and you get 10%. Now along comes a hurricane that rips a significant portion of the roofs from 40% of the houses. Even DOUBLING the number of roofing contractors and workers in the area still means that it will be at least TWO YEARS before all the houses are re-roofed.
I don’t think buyers will be beating down the doors to buy at that price, at least not for the next few years.
There’s lots of buyers out there, but how many of them are qualified buyers. This is where it’ll get dicey.
Bill;
I’m in Orlando and am a realtor and an investor. There are buyers for discounted properties and I am seeing these properties more frequently. I don’t think there is a significant number of buyers, but enough to make a few sales, if the price is right. To sell a house now you have to be at least 30% below comps. For an investor, I would have to buy at 50% or more below comps to make any money. I see that situation changing and prices decreasing.
If all houses were suddenly discounted 30%, there would be no mad rush to buy. There are not that many buyers
And yes the “Vultures” of which I am one are looking for properties at 25 to 30% of comps.
It’s a given that prices will decline further, I’m thinking that for some unknown time period they will dip below 50% of the 2005/2006 peak. Again, the median income has to be able to buy the median house.
What’s hysterical is this from the above article:
Vultures have been circling over the slumping Southwest Florida real estate market for a while, but few have descended to snatch properties from increasingly desperate builders and developers — until now.”
“Documents obtained by the Herald-Tribune show that Joseph L. Long, a little-known, New Jersey-based real estate investor, is negotiating with about 60 area developers and builders to buy 1,500 homes and condos at a 30 percent discount to their current list prices.”
“If Long, who has never done anything of this magnitude before, is successful in lining up the $700 million needed to pull off the deal — a very big if — it could have market-shaking consequences.”
“‘I’m extremely skeptical about a guy with no track record who doesn’t have financing in place,’ said George Huhn, a Venice real estate agent and foreclosure specialist. ‘If he thinks he’s going to get money from a hedge fund, I’ve got news for him: The liquidity out there is zero. The mortgage crisis has taken all the liquidity out of the market, and no one is sure what is going to happen.’”
I’ve got news for Mr. Long. 30% below their current list price is no bargain for an investor. What’s he going to have to sell them at to make a profit? Try list price, or close.
Long is the poster boy for the “greater fool” theory.
And yes the “Vultures” of which I am one are looking for properties at 25 to 30% of comps.
We’re all vultures in that respect. A lot would like to buy soon at 25-30% of comps.
Ghost;
Nothing wrong with making a good deal.
But doesn’t Carleton Sheets say to buy at 30% off and resell at 99% and make a killing?
Yes, but how many people actually read it??
A while back I heard about a time when they mailed something like 500 courses out where either the tapes were blank, or books had blank pages, or something to that effect. If the story is correct, only 5 people returned the courses and got new ones.
what I actually have to read the manual? I thought all I had to do was buy the course to become a millionaire in my spare time, working from my kitchen table in my underwear.
Darth — there is a pretty heated catfight going on in the comments section of the Orlando Sentinel article referenced in this post.
On ch 2 in Orlando last night they had a story on the Condo meltdown in Downtown. I’m surprised anyone in Florida still questions the bubble.
Except for that guy in NJ who is trying to buy houses 30% below list.
I would like to know who this new vulture money is? I will be looking at new REITs that start up in the next couple of years who buy at 25-30% of current value. I think there is money to be made at those prices. As time goes on and as the debate on this blog progresses to the bottom it would be a great topic of discussion. “What products have been created that will capitalise on the housing collapse.” Of course, this discussion is a couple of years premature!!
“They really want to feed on the dead carcass…”
I love the smell of rotting FBs in the morning! I, for one, look forward to seeing this transpire…
Anyone here recall how 1-2 years ago we were regularly being ridiculed by (long-since-gone) perma-bulls & trolls about how if you were expecting 50%+ off price drops, you were being “delusuinal” and “just kidding yourself”?
So who’s laughing now?
“You can’t indict a river.”
Earlier this summer Barbara Corcoran was on the Today Show pimping the great deals to be had on condos in college towns. Now she’s changed her tune. Has she been banned from the squawk circuit? Or has Matt “Sexy Time” Lauer apologized to his gullible viewers for bad intel? Obviously not.
I would say for the newly converted “experts” touting 25-30% drops, keep to your religion HBBers, and wait for real 40-50% declines. I forget the phrase for the “false rise” that traps investors on a long-term downtrend, but I think that will happen shortly — right before the big, fat parachute drop that the patient are waiting for.
Wow, I really mangled “delusional”. Must remember to spell check before hitting the “Add comment” button.
It looked right to me. But then, I’ve been drinking Screwdrivers since noon.
These are the times that try the skills of real estate professionals, says Jim Crawford, a real estate coach in Atlanta.”
Excuse me. I must really be getting old. What is a real estate coach? Is that like a life coach or a feng shui master?
I was talking to a dude the other day and he told me he was an area coach for kmart. I asked, what the hell do you coach? He looked at me like I was nuts. Evidently instead of a manager they are now calling themselves coaches.So I assume he is a real estate manager.
As with baseball teams, you don’t have to pay a coach as much as you would pay a manager.
I noticed an increase in the number of “coaches” about five years ago. Can’t help but wonder who hires them.
They’re not employees, they are associates. And they’re not managers, they’re coaches.
Just the lasted made up gobble dee gook in business speak. There is a whole industry out there for this crap and businesses pay big bucks to “talk” the latest “talk”. My wife is a sales training “MANAGER” and you should see how the biz speak changes from month to month, and of course they use last weeks words as this week’s definition. What a waste of time and money.
I remember the first time I was in a meeting and heard my new ‘manager’ say he was going to be ‘out of pocket’. The visual made me laugh, and I asked if he was ‘in the pocket’ when he was in his office. Funny thing, I was moved to a different ‘manager’ not long after. Guess I shouldn’t have made that comment in front of 20 other people.
It’s one of those awful people who hosts seminars about “How To Make Millions In Real Estate” but whose entire fortune comes from selling tickets to seminars, not a penny of real estate.
Coaches are over with… We have Lifestyle Urban Scientists here in South Carolina
http://www.lifeurban.com/
wmbz,
where in SC are you?
Apparently these real estate professionals weren’t professional enough to put away their five-figure paychecks into a savings account. Then they wouldn’t have to worry about trying their skills during these trying times.
Zonker Harris in Doonesbury tried to make it as a tanning coach back in the 70s. Maybe real estate coach is something like that.
Coach: “ok team, lets huddle-up. The plan is now for all you realtors to go get a job at 7-11. the game is over. we lost”
I want to be a Makers Mark coach.
I went looking for Rob Allegra quotes to see if we might properly eulogize him. Instead, I stumbled upon this July 2006 gem, from the message board of the “San Diego Creative Investors Association,” which bills itself as San Diego’s oldest real estate investing club:
“Thehousingbubbleblog.com provides a romper-room, food-fighting type of atmosphere for certain personality types and age groups that doesn’t transfer and is not appropriate here. Consuming nothing but cherry picked, negative housing snippets from alien-abduction-level ‘news sources’ can sometimes warp one’s sense of reality and propriety.”
“They really want to feed on the dead carcass,”
Nothing like using your beak to rip open the bloated body of a week old dead raccoon. Especially on A1A.
I’m sorry, was that inappropriate?
“alien-abduction-level ‘news sources’”
Snicker… we’ve learned the hard way they’ll try to taunt us to silence. Funny thing is, the market is telling the story.
As to being a vulture, heck yea! The dam is broken, talking about issuing rain coats to the masses is a wee bit late… Yea, J6P doesn’t know yet. He’ll just know when the wave of water sweeps away his beer fridge.
Got popcorn?
Neil
WSJ, Bloomberg, Financial Times…..yep, all certified wack jobs.
that was disgusting.
….carrion….
Only appropriate if you are a “certain personality type”.
I will cop to being a CPT, but the reference to “age group” -
I don’t get that one. It seems all ages are represented on HBB.
Yeah, I used to participate on a much less active housing crash board on SI before I found this. There were plenty of snide remarks made about the participants here being 20 something pissed off Californians who missed the chance to buy into the bubble.
Well, I have news for that bozo. I made a small fortune on KBH puts in 2004 while things were still blowing and going. I think it was 22-23 points on 100 of them. And he’s out of work now. LOL
“….for certain personality types and age groups …”
Well I must be that certain personality type as I have found sanity here thatr has been clearly lacking in the changing America that I knew 10-15 years ago. I thought thatAmerica was dead and I was a zombie walking throug the ruins as everyone pointed and laughed at us. Now I see there are others who think and act like us. Sort of an Omega man senario.
“…this July 2006 gem, from the message board of the ‘San Diego Creative Investors Association,’ which bills itself as San Diego’s oldest real estate investing club…”
That was before Jeff, one of their super-hot-shot investors and advisors, imploded and was belly-up and depressed, as I recall. It was sad to follow. Think he quit posting about six months ago or so, though I haven’t checked back.
CNBC flapping heads discussing Bernanke’s speach.
Kulow spends the whole time telling the fed to lower rates to bailout the idiots that created the credit crunch. He ends with “Free Market Capitalism is the best route to wealth and prosperity…” The mantra of his false religion.
Mark Hains says “We’ll ask you about that when we discuss Bush’s proposal to use FHA to bailout the mortgage mess”.
I was thinking the same thing “Free Market Capitalism is the Best way to Prosperity” - As long as Ben B., George Bush and the US Congress can help bailout the idiots who lent money to other idiots. What was the level of speculation house buying, wasn’t it like 40% or something.
Buhes speach - just a bunch of words - that others should take action. Just political mumbo jumbo. These people who have adjustable rate morgauges could never afford a fix 30 -at any % rat, thats why they took the BS loans and bought well more than they could ever afford- I say they should all burn.
So much for free market capitalism!!
True “Free Market Capitalism” bears no resemblance to what Kuntblow is talking about. What he wants is Fair-Weather Capitalism (i.e., Privatize Profits, Socialize Risks), where only bankster profits are unregulated, but the losses are completely socialized.
First, make everyone resolve their disclosed income (to “qualify” for the mortgage), with their IRS income tax filings….
..
I agree.
First order should be for the FB / Flipper to step up and reconcile their 1040 income with what they put down on the mortgage application(s).
Next should be a search to see just how many properties said FB / Flipper owns and to check and see how many of ‘em the FB / Flipper claimed as primary residence.
Those two little “litmus tests” would keep many fearful FB / Flippers from stepping up with their beggar cups looking for help from the Gubmint.
The effect will still be the same, regardless of what the Gubmint does. Too many people are WAY over their heads in houses they could never afford in the first place.
We will not be able to print enough dollars to get out of this mess.
BAIL or JAIL
if you lied jail ,not bail
Ha - that’s all we need is an economy completely undergirded by imprisoning all FBs/flippers/frausters, etc. That would cause a new construction boom (for jails), lots of jobs (corrections officers) and an even bigger bill for the taxpayer.
“frausters” = “fraudsters”
This used to be how it worked. For the self-employed who wanted to buy a house, there was a trade-off between saving on taxes and showing enough income to qualify. One of the many “innovations” of the past decade was the stated loans that did away with the trade-off.
“This used to be how it worked. For the self-employed who wanted to buy a house, there was a trade-off between saving on taxes and showing enough income to qualify.”
I’m self-employed. When I bought in 1996, my loan officer made adjustments to income based on my Schedule C write-offs, to compensate for the fact that I had write-offs that a W2 employee didn’t have…so they did take that into account, that a self-employed person typically shows a lower net income. And I did full doc.
Yea, but you guys are overlooking a really BIG group of over-extended borrowers that used “stated income” loans………..ILLEGAL ALIENS.
They bought houses too. Not with a SS card, but with a FED ID card. The Banks didn’t want to “discriminate” on immigration status, and that clown in the oval office wants to give the a free ride.
What happens when we start to ask questions about how they earned their money. If you are not here legally, the earnings are illegal. You should not have been given a loan.
There are probably millions of these loans.
Just look around and see where illegals are living.
How can they afford all the stuff they have??
NO TAXES, money under the table and
“NO doc Loans”>
What does FB stand for?
Thanks in advance.
F@ucked Borrower
LOL — Crispy, think you forgot to delete a “u.”
No he didn’t.
Obviously Bush holds more stock than he does cash. These bail-outs make me sick.
Elections coming up. Got to pretend that you are doing someting.
Hillary proposes a $1 billion rescue fund. That will last about a half-hour. Then they’ll be back asking for $100 billion.
Elections coming up. Got to pretend that you are doing someting.
So true. The KY Warren County Sheriff’s like to zoom around residential neighborhoods at 50 MPH during the two weeks before election. Only time you ever see them on the residential streets.
And sometimes they even let the insurance on their cruisers lapse.
Got 10% down?
“…if you can’t sell in Chicago, you can’t buy in Atlanta. If you can’t sell in Boston, you can’t buy in Florida.”
If you can’t sell in Florida, you can’t buy in Carolina or Tennessee.
How can that be? All real estate is local…
“…if you can’t sell in Chicago, you can’t buy in Atlanta. If you can’t sell in Boston, you can’t buy in Florida.”
Let’s expand that…”If you can’t sell in (fill in), you can’t buy in (fill in).
So how many markets in the U.S. are burnt toast -);
And I wouldn’t worry about Bush’s bailout plan….it is estimated to help 80,000 borrowers, and aren’t there something like 2 million loans that reset next year? Also, it doesn’t help the fact that lending standards are getting tighter by the month. If there is no more secondary market for mortgage junk, then the pool of buyers will be a fraction of what it has been. It’s a symbolic gesture, nothing more.
The current mess was predicted on this blog at least a year ago….record inventory, made worse by foreclosures, pricing pressure, massive resets….all at the same time that fewer people qualify for a mortgage. And the smart folks won’t want to touch RE with a ten foot pole while this mess unfolds.
Since someone asked for it, here are the details:
In terms annouced on Bloomersburg President Bush announced his new bailout plan for the FBers. Bush engaged the help of embattled Larry Craig (Sen ID) in a last ditch effort to save him before he resigned.
The plan calls for FBers to simply state: “Really, im not a flipper. I dont do that sort of thing…….i may have signed the loan documents, i really cant deny that but actually i was just waving a pen over the desk trying to pick up a piece of paper” If the interview persists then try plan B “no, i was only in that loan office to use the bathroom, really, i didnt know that people actually took it up the @$$ in there. (and repeat) that isnt the sort of thing i do”
Bush expects to have huge support for this initiative. To raise the money Bush has proposed installing pay toilets in the Minn Airport restrooms and asking Law inforcement to ‘cool it’ with their entrapment routines…..
LOL Jasper!!!
Convert flipper home bathrooms into cruising areas for FB’s, Realtwhores, Politicians, Musicians and put a title on it call it some stupid thing like “Farm Aid”
That’s the part I don’t get. Who is going to support Bush over this? The Dems already hate him - this won’t change their mind. True conservatives’ blood will boil over this plan. So he is left with independents … except that all independents left the Republican party long ago over the war and the deficit spending.
You try to please everyone - you end up pleasing no one.
Jasper — really funny — nice parody.
thanks, i try to save my best stuff for SNL skits……….who knows, maybe that one would work well
and im not even from i-da-ho, i dont do that sort of thing. Perhaps an idaho realtyhwhore could sort him out……..
The plan calls for FBers to simply state: “Really, im not a flipper. I dont do that sort of thing…….i may have signed the loan documents, i really cant deny that but actually i was just waving a pen over the desk trying to pick up a piece of paper” If the interview persists then try plan B “no, i was only in that loan office to use the bathroom, really, i didnt know that people actually took it up the @$$ in there. (and repeat) that isnt the sort of thing i do”
Austing Powers: “That’s not my bag baby.
Bush says it isn’t the government’s job to bail out speculators.
You can clearly see that Bush was very annoyed with dealing with the “subprime” market. I could not resist laughing when he mentioned that “some people don’t even know the meaning of refinancing.”
“some people don’t even know the meaning of refinancing.”
Not in this country. This country is the king of refi.
How will they differentiate between homeowners and speculators? Anyone who bought in 2004-2007 can be both.
After 7 disastrous years of Bush it’s pretty frightening to ponder what he believes the job of government is.
“Documents obtained by the Herald-Tribune show that Joseph L. Long, a little-known, New Jersey-based real estate investor, is negotiating with about 60 area developers and builders to buy 1,500 homes and condos at a 30 percent discount to their current list prices.”
Substitute the word ” Investor” , with Dreamer, Dumba$$, etc. This is one of the main reasons for this Bubble. Millions of people who knew nothing about RE bought a book from an info-mercial and thought they became an overnight RE genius.
Buying a Discounted property from a Builder to Resale, is like buying clothes at Wal-mart on the 30% off rack, that nobody wanted , then trying to sell them on eBay for the retail price that Wal-mart couldn’t get , and paying the listing fees and commission to sell them, hoping to make a profit. On top of that He wants to ” borrow the money” so his investors can make a profit too.
Anyone who wants ” INVEST” money with this “Sure Fire Money Maker” , please give Me a call. I have at least a $1,000,000,000,000 of ‘ can’t lose investments ‘ for astute investors.
He’s going to make his fortune by not selling the houses, just like farmers make money by not growing crops. Bailout, subsidy…..same thing.
Well well well. All the talk on this blog about Dodd, Clinton and the Dems proposing a bailout, and the Republicans beat them to it.
I’m sure there will be outrage about this from our resident Republicans, right?
Right?
Yes Joe, there will be. Here I am, lol. No bailouts for anyone, by anyone. Both sides should get smacked for even thinking about it.
You are still such a partisan joke.
Everybody, with any sense on this blog, is pi$$ed about any bailout proposal no matter who is doing the proposing. Everybody but apologists like you.
I’m trying to say yes, right, but my posts keep disappearing.
LOL
My thoughts exactly.
Bush should stay out of this mess. Whatever he touches turns to mud anyways, so he should be the lame duck and shut up.
I would guess that most people on this blog don’t think in terms of parties (if you do you need to wake up!)
Both parties are authoritarian and neither party is *really* in it for the American people. It is all a power game.
Ron Paul and a hand full of others are all that is left of the “Jedi”
You betcha I’m going to slam any bailout no matter what kind of self serving lifer politician proposes it. The only real Republican is Ron Paul. I don’t know what Bush is, but he’s no conservative.
“‘They don’t want to buy property for 70 cents on the dollar,’ Huhn said. ‘They want to buy for 25 to 30 cents on the dollar. They really want to feed on the dead carcass,’ Huhn said.”
——————————
Mmmmm! Tastes like popcorn, eh Neil?
Huhn (what a name!) just insulted vultures.
Yeah, doesn’t it mean “hen” in German?
‘They want to buy for 25 to 30 cents on the dollar.
Which is about what it was worth 2 years ago.
“‘It’s simple. Our market is in a coma,’ said Debra Garrett, an agent in Sarasota.
Kinda like common sense the last 5 yrs.
Right. But the econmy was at least somewhat functional then. The upcoming recession/depression will depress those prices even further.
O/T: I think that someone mentioned seeing this a week ago but last night and then again early this am PBS tv ran a program called the “American Experience” about the 1929 stock market crash. Wow, I thought that I was living through it today, not the stock market crash but the housing crash and financial debacle were a perfect parallel. If the parallel were to hold up I’d guess that by April of next year we’d see some life altering events. My guess is that people will weather any down turns going into New Years with everyone expecting a better 2008 and then whammo as the world catches up.
“‘It’s simple. Our market is in a coma,’ said Debra Garrett, an agent in Sarasota.
Kinda like common sense the last 5 yrs
VOTE NO BAILOUT ON AOL!!!
Right now it’s 63% “NO”
http://news.aol.com/business/story/_a/bush-tackles-subprime-mortgage-crisis/20070831070509990001?ncid=NWS00010000000001
It is sad that 37% support a bailout.
“Right now it’s 63% ‘NO’”
As always, it’s a matter of how the question is worded, a la “Do you still beat your wife?”
The AOL question is, “Bush proposed allowing strapped homeowners with good credit to refinance. Your opinion?”
Were it to say, “Bush proposed to use taxpayer money to subsidize mortgage loans to strapped homeowners with good credit,” I venture that the “No” percentage would be 90%+.
Everybody around me bought an investment home in Florida,’ Mr. Khandakar said. ‘Florida was all over the news; my friends were doing it….I didn’t want to miss out.’”
If everyone jumped off a cliff would you?
“Aside from that, she said, many potential home buyers are still on the sidelines, not even looking at homes, while would-be home sellers continue to flood the market with properties, seemingly oblivious to the slowdown and hoping to cash in on the past five years’ worth of paper gains.”
Soon enough, these Realtors (TM) will all understand that the people who pay with 100% down for a stupid house will not be paying a dime until we get value for our money, just like everything else we purchase.
“‘For every one sale we make, we’re getting 12 listings,’ Lutz said. ‘It’s just been really, really hard.’”
I believe the next recognizable “phase” of this housing mania is just around the corner; the mad dash of Realtors (TM) for the exits. They will realize there are not that many other jobs available, and if they want to land a job then they better hurry up and make their transition ahead of the crowd.
Got 10% down?
Unsolicitied resumes have just started to reappear in my office over the last two weeks. Not from realtors, although one was previously a mortgage broker a few jobs back.
Not much time left, rumors about massive layoffs on Wall street ahead of bonus season. Hurry and get your pink slip.
Bush knows he can’t get anything through Congress ever again. Is his proposal for bailouts really his way of saying no bailouts? I wish he were that smart.