Just Kind Of In Limbo Here In Florida
The Orlando Sentinel reports from Florida. “The financial collapse of one of America’s legendary home builders has left people throughout Central Florida stuck with unfinished houses, liens against their properties, unopened clubhouses and community pools, and warranties that could be worthless. Many of the victims, scattered throughout the Southeastern United States, don’t know whether their houses will ever be finished.”
“‘We’re just kind of in limbo here and waiting to hear,’ said Vincent Santanelli, a resident of Cascades at Groveland who helped his elderly father-in-law with a $20,000 down payment on an unfinished house in the Lake County community. ‘We haven’t even heard a word from Levitt.’”
“A company Web site says Levitt’s future is uncertain, the status of homeowners associations that it previously ran is ‘not yet clear’ and it can no longer honor home warranties.”
“With only 72 employees left out of about 500, Levitt and Sons ‘just does not have the resources to continue to serve as intermediary,’ said Paul Singerman, lead bankruptcy counsel for the builder.”
“At Jesup’s Reserve, the pool and cabana are off-limits because construction is incomplete. A ‘No trespassing’ sign warns residents that the area is a construction site and that entering it without permission is a felony. Resident Maggie Martin fears a closed cabana and pool will be ‘a tremendous drain’ on property values.”
“With almost 70 units of a planned 161 complete, there should be enough money coming in from association dues to keep things running for a while. ‘I think they can limp along’ and raise enough money to pay for maintenance of common areas, said Matt Jordan, a property manager.”
“‘We want to at least maintain the bare minimum,’ Martin said.”
“But the situation is more precarious in Turtle Creek, with only a few homeowners around to pay the bills through their monthly assessments. The budget calls for $18,000 a month to be spent on landscape maintenance.”
The Daily Business Review. “The developers of Downtown Dadeland are walking way from the massive mixed-use project in Kendall and handing over the unfinished complex to construction lender Goldman Sachs Commercial Mortgage.”
“Gulfside Development principals Jackson Ward and Stefan Johansson say they can no longer afford to make payments on the $224 million construction loan and won’t fight a foreclosure suit filed two weeks ago in Miami-Dade Circuit Court.”
“The project’s failure is the largest yet in the current real estate downturn, which has hit the overdeveloped condo market especially hard.”
“‘It is a friendly handover,’ said Johansson, principal of South Miami-based Gulfside Development. ‘We have been helping them in the transition for almost a month. There are no bad feelings, and we wish them good luck with a beautiful project.’”
The News Press. “Cameratta Properties is reassessing how to proceed with its mixed-use residential and commercial project First Street Village in downtown Fort Myers because of the soft housing market.”
“Before moving forward, Cleveland-based Cameratta must decide whether to scale back the residential part of the development because it’s hard to get financing to build homes nowadays, CEO Joe Cameratta said today. Financing for retail and office construction, he said, ‘is much easier to obtain. The economics make more sense.’”
“Ed Bonkowski, a Fort Myers-based commercial real estate broker, said cutting back on the residential is ‘a good idea. They were unrealistically priced in the market when they first opened their doors.’”
“The First Street Village sales center has been relocated to the sales center for High Point Place, Cameratta’s nearby high-rise condominium project.”
“Colin Kelly is an associate with Commercial Realty Group of Bonita Springs, which specializes in leasing, land sales and new construction. Formerly a securities broker for companies such as Smith Barney and Shearson Lehman Hutton, the Naples resident has worked in various areas of the local commercial real estate market since the late 1970s.”
“Kelly believes that the accuracy of the old industry saying that commercial real estate trends tend to lag behind those of the residential side is being borne out by Southwest Florida’s current market conditions.”
“His recipe for reversing the current commercial slump involves an attitude adjustment on the part of everyone involved — property owners, prospective investors and real estate agents. Fence sitters waiting for prices to plummet even further, prospective buyers hamstrung by fear of losses and property owners reluctant to lower prices when vacancy rates are high need to realize that their mindsets are helping to prolong the slump, in Kelly’s opinion.”
“Q: What is Commercial Realty Group doing to address current market conditions?”
“A: We are considering taking the abnormal rise in real estate rates since 2004 and removing it from the equation. We’re considering rolling back our lease-rates and our properties for sale, back to pre-2003, pre-2004 prices. That would eliminate the investor having to say, I’m going to wait until the market goes down. This is what has to happen in commercial real estate because there’s a whole lot of property that’s going to come on line over the next six months to a year. You’re going to see prices continue to spiral down.”
“People need to stop saying this is a hiccup. This isn’t a hiccup. If people are going to play in this market place, they should say, lets play, let’s be on the side of the buyer. I’m putting myself on the side of the buyer. I’m saying (to the investor), if you want to come back into the marketplace, I’ll show you a piece of property that’s priced right. You’re not going to have to chase a piece of property that’s spiraling out of control.”
The St Petersburg Times. “Concerned about the safety of their money, local governments are pulling their cash out of a $20-billion state-run investment pool. Pinellas County joined the exodus Tuesday, yanking out its entire investment, $290-million. Some $6-billion has left the pool in recent weeks, costing it nearly a fourth of its assets.”
“The state pool is another casualty of the meltdown in the housing and mortgage markets. Even though it holds no subprime mortgages, the state pool owns securities backed by other types of mortgages.”
“‘You can’t take a chance,’ said Ron Miller, finance administrator for Pinellas Park. He withdrew $14-million from the state pool Friday and is considering what to do with the remaining $8-million in city funds held by the state. ‘The primary thing we’re doing is securing the money. The return is a secondary goal. … We may pull more in the next day or two.’”
From Florida Today. “Today Brevard County can complete a whirlwind month of major acquisitions by the Environmentally Endangered Lands program. County commissioners will review two deals to buy a combined 1,500 acres for conservation in Scottsmoor for $24.2 million.”
“But Clerk of Court Scott Ellis plans to repeat his concerns about other recent deals. He argues the county is paying peak prices in a down real estate market, and that appraisers have made wrong assumptions about the properties’ development potential.”
“‘We’re paying far more for property then it’s worth,’ he said. ‘Why do we have to rush these purchases through?’”
“Of the two deals, the smaller one offers 669 acres for $9.16 million. The price is in between two appraised values from June 2006 and more than double what the land sold for in 2003.”
“The larger one — 853 acres for $15 million — is roughly $5 million below two appraised values from March of this year. The land last sold for $5.4 million in 2005, according to Ellis’ office.”
The Palm Beach Post. “The real estate slump has prompted Home Depot’s former wholesale arm, HD Supply, to scale back at its new plant in Port St. Lucie.”
“Instead of creating 100 jobs as planned at the 223,000-square-foot lumber and building-materials plant that opened in August at LTC Industrial Park, Atlanta-based HD Supply is sitting tight with 10.”
“‘We believe this staffing is appropriate in light of current market challenges,’ HD Supply spokeswoman Lauren Falcone said in an e-mail. ‘We intend to continue to staff as appropriate for market conditions.’”
“That’s not quite the return on investment the Port St. Lucie City Council was hoping for when it sold the 21-acre parcel to Cox Lumber for the super-discounted price of $100,000 in 2004. HD Supply later acquired Cox Lumber.”
“The city’s original contract with Cox, which HD Supply was bound by, required the firm to create at least 60 jobs within a year of opening and 100 jobs within two years. If it didn’t, it had to pay the city up to $1 million.”
“The council agreed this summer to give HD Supply another four years to hire 60 people and five more years to hit 100.”
The News Journal. “There won’t be many tinsel-and-bow topped gifts under the Christmas tree at the homes of Ray Moore and Ron Paulsen. ‘We’re going cheap this year,’ Moore said of his Christmas list.”
“The blame for that goes to Flagler’s fizzled housing market, Paulsen and Moore say. The men formed a drywall company 35 years ago and have spent every day since building it and their reputation as contractors.”
“Ask them how much longer before they may have to close up shop forever, Paulsen looks to the sky thoughtfully and jokes, ‘Let’s see, have I got enough gas to last another week?’”
“Paulsen and Moore have survived slow housing markets before. It’s part of the ebb and flow of their industry. But this slump takes the award for hardest yet, they said.” “Why? There could be several reasons, they admit.”
“They say maybe it’s that they’re getting older. Maybe they should have saved a little harder when work was plentiful. Maybe it’s because they weren’t prepared to run their business this year without the $60,000 owed to them by multiple builders facing criminal charges.”
“Whether it’s one reason or all of the above, right now they’re just doing what they know to do until it gets better or they can’t do it anymore, Moore said. ‘We’ve never cut a corner,’ Paulsen said, and they won’t be starting now.”
“In housing slowdowns of decades past jobs were few, Moore said. In this one, there are none. They’ve gone from doing as many as two jobs a day working six days a week to working only three jobs in all of September.”
“So at the grocery store it’s generic instead of name brand. It’s health food instead of health insurance. And the little extras here and there are no more. But they can only penny-pinch so much and little good it does if there are no pennies to pinch, Moore said.”
“This year has brought with it a fight for their business and their future, but they’re doing everything they can to keep three decades of effort on the map and in the phone book.”
“‘Christmas? How do you spell that?’ joked Paulsen.”
‘We want to at least maintain the bare minimum,’ Martin said’
‘Christmas? How do you spell that?’ joked Paulsen.’
Aren’t these booms grand, Federal Reserve, NAR, etc?
Aren’t these booms grand, Federal Reserve, NAR, etc?
The booms are grand for those at the top as they collect millions when they are fired or through stock options, while leaving the other employee’s with nothing but a pink slip and limited unemployment benefits that would not cover most mortgages. The shareholders end up covering the costs of senior management’s severence package.
“A company Web site says Levitt’s future is uncertain, the status of homeowners associations that it previously ran is ‘not yet clear’ and it can no longer honor home warranties.”
Clair Voyant will now look into the crystal ball and predict. Levitt has no future.
“But the situation is more precarious in Turtle Creek, with only a few homeowners around to pay the bills through their monthly assessments. The budget calls for $18,000 a month to be spent on landscape maintenance.”
This has got to be a friggin’ nightmare. Does anyone know how a situation like this plays out? Any historical examples of partially occupied developments going bust and what happens to the HOA? Sheesh, at least with a single home in a traditional neighborhood, the damage is limited to the foreclosure on the individual property and the local gov takes care of the gov services, while individual homeowners take care of their own properties.
Maybe one thing that will come out of this is fewer HOAs.
I’m hoping so, Ben. IMO, HOAs on a mass scale is an unworkable model for the majority of the population in the US. I can see it MAYBE working here and there for an established community whose residents have large savings and strong financials, but that’s not most of the US.
A Florida realtor told me back in the mid 1990s that HOAs benefit mainly developers/builders and local govs. There’s more profit for the developers and for the local govs, HOAs absolve them of a certain amount of responsibility such as maintaining interior roadways, tree trimming, trash removal, etc., depending on the region. And yet they still get the same amount of taxes from the homeowners. What a racket! Residents are duped into thinking the HOA “maintains property values”. LMAO! When an HOA takes a dump, you have an instant slum beyond redemption, instead of a slower decaying traditional neighborhood, which can be revived and gentrified.
That’s why I will stay away from HOA foreclosures. Too much uncertainty.
You remember that case in Plano a few years back where some guy paid 4 or 5G to reroof his house and was forced to tear it off and reroof it because the HOA didn’t like the color?
I will stay away from HOA foreclosures, too. My one experience with a small (36 unit) HOA, both on the board and off the board, demonstrated to me what a fragile mechanism it is. A couple of troublemakers can cause the entire community to suffer, even one foreclosure can place an eneven burden on all residents, stupid financial decisions by the board hurt everyone, personalities can clash, etc. etc. The HOA where I lived was self-managed by the residents and the only thing that prevented the installation (and additional expense) of a property manager was the fact that most residents couldn’t afford it.
txchick57 said:
You remember that case in Plano a few years back where some guy paid 4 or 5G to reroof his house and was forced to tear it off and reroof it because the HOA didn’t like the color?
Ok, that part of HOA’s I like. Or do you not recall the purple tile rooms of the late 1970’s? Yuck! Ok, the ones that regulate the color on the back side of the curtains go too far… But there must be some middle ground.
However, that said, HOA’s are almost always taken over by Realtors and the end result is that they force people to re-roof, paint, and do other stuff uneconomically too often to spruce up a neighborhood.
and yes… I’m being wishy washy (which isn’t the normal me), but I’ve seen both sides… the pendulum just swung too far towards strong HOA. It will now slice back the other way.
Got popcorn?
Neil
I think that saying “HOA” is roughly like saying “house.” There are huge ones and tiny ones and contentious ones and nominal ones. Here in Florida, I’ve seen HOA fees as high as $650 a month (or more) for fancy condos, to less than $10 a month for a neighborhood with one fountain and some entrance shrubbery to maintain. What I think matters most is, What teeth do they have, and is that good or bad? In this state, it is governed by the “covenants” that run with the property either indefinitely or for a fixed number of years.
It’s roughly like comparing pro football with AA college football with high-school football with pee-wee. Same name, but vastly different animals.
A nearbye HOA has declared rules like “no unwed couples living in a single rental dwelling.”
I’ve always wanted to live in a HOA controlled neighborhood, and paint a house with clear to the eye, but UV reactive paint. Then at night time, illuminate the house with UV lights that make it glow like a sour candy… so vibrant it makes the eyes pucker up and water. There are a couple systems that are used by places like Disney… you can get the paints in different colors and wavelengths, so you can cycle through lights and have different “invisible” paintings come to life. During the day though, everything would look absolutely normal.
“A nearbye HOA has declared rules like ‘no unwed couples living in a single rental dwelling.’”
I think that more power is being ascribed to HOAs than they actually have. Nowhere, to my knowledge, do HOAs have any more authority than that spelled out in documents that you can find at the courthouse. While condo HOAs can change basic tenets by majority or super-majority vote on the articles of condominium, I suspect that in most places getting major changes and recorded (a critical part) is much more difficult.
In condos, HOAs, supported by state condo regulations, can dictate how many related and unrelated people can live in unit, but in Florida (and I suspect everywhere else) that number is dictated by the number of bedrooms. So the Va. Beach restriction may be a case that happens to involve a one-bedroom unit and such definition is likely already supported directly or indirectly by state condo laws.
My aunt lives in a big gated country club community and it’s like going to Disneyland. Golf course homes where everything is perfect all the time. These are all rich retirees and they are willing to pay for this. They get amazing amenities and service and the grounds are beautiful. I doubt it would be any cheaper for them to individually pay for the level of service and amenities they have. I don’t object to people choosing to live this way and pay for it. My objection is that HOAs have now creeped into regular SFH neighborhoods where the HOAs provide little except to harass the homeowners and require payments for very little service.
That’s exactly right, crazy. We have a nice retirement community community nearby that was originally Del Webb. Mostly affluent retirees from the Midwest, originally, although that demographic has changed somewhat. The HOA model has worked successfully for them over the years, since the 1960s, and I have no problem with it in a case like that. But as you’ve pointed out, it really doesn’t work on the regular SFH neighborhood level.
HOAs are necessary when there are a lot of common amenities to maintain. In our case that’s a golf course, club (with bar and dining rooms), fitness center, tennis courts, marinas, and a couple of small parks. Fortunately the community is over 30 years old. That means two things: 1- covenants written back then were a lot less intrusive and 2- people have long since “mellowed out” with respect to enforcement. Budgeting, allocating resources, and growth management are far more important here.
Can someone explain to me how the f!ck can anyone justify spending $18,000/mo on landscape maintenance? I bet that HOA has under 100 houses. That’s $180/mo JUST to maintain -landscape-?
The landscape contractor most likely is connected to the builder/developer/twp. official or anyone else involved in the “racket”, as Palmetto so aptly describes it.
I was in a small HOA in the ‘intermountain West’. They must spend a fortune for water, just to keep the areas between the houses green (because green is a ‘must’, of course, even in the desert). The whole neighborhood felt so dead, though. Everything the same. Never again will I live in an HOA.
Depends on the size of the community and what they get. At my Aunt’s place there’s a golf course and lots o lawn, plus they plant flowers seasonally (normal in the CA desert) and reseed the grass seasonally, plus they trim and maintain hundreds of trees and take care of 14 pools, clean the streets, take care of trash and recycling, and maintain the lakes and water features. I’ve lived in small gated community where they barely took care of anything and the fees were a total rip off. I don’t think you can generalize about costs without more information.
I absolutely can. It is pretty simple - if times are tight, one does not go to a five star restaurant. Why on earth do they not cut down on bullshit maintenance?!?!?!
This place is amazing…middle of nowhere and a 40,000 sf unfinished clubhouse. Maybe 200 houses and all the infrastructure for maybe a 1000 more. I did a few appraisals there and came in roughly $50,000 under contracts drawn in 2006.
I had an exec-VP call me about my values. I explained I used Levitt sales. She said, “oh we had to dump those because the buyers backed out. They aren’t real.” Seemed real enough to me so I stood firm.
Sounds like the homeowners are going to have to get their lawnmowers out and start mowing the common areas. Maybe they’ll just let the common area lawns die out; after all, Florida is in a drought, so why water?
There are several large-scale projects under-way in Palm Beach Gardens, near where I live. I can see these becoming huge dust bowls soon. The shame is that the land used to be covered with dense vegetation and was great to trap through, looking for fauna.
Florida - the new dustbowl state.
er, “tramp” not trap.
“Florida - the new dustbowl state.”
Not to far from the truth, but for now Georgia’s got us beat. This is what people are too stupid to realize: trees, vegetation, etc. clean the air and attract moisture in the form of rain. But oh, no! Let’s mow ‘em all down, build a bunch of crappy developments nobody wants or can afford and let the water run off instead of percolating down to the aquifer. Hey, we’re all set here in FLA! That housing will bring in tax money! Ooops, spoke too soon. That housing is empty and is now absorbing tax money in mitigation of code violations and crime.
And then there’s the water problem. Yes, a water problem in the one state in the union with the most freshwater springs anywhere. Why? Because the govs at the state and local levels are too stupid and busy pouring money into unworkable de-sal plants and buying crappy developer sloppy seconds and burned out phosphate mines at exorbitant prices, when they should be taking by eminent domain private land like Crystal Springs, where the owner negotiates a lease with Nestle-Waters, a French company. Nestle Waters comes in, builds a wall around the springs so nobody can see what they’re doing and pumps out the source of the Hillsborough River, Tampa’s water supply, to ship bottled water all over creation. So everyone freaks out when the river runs low during a supposed “drought” and starts talking about building reservoirs and de-sal plants, when the entire problem would be solved by taking the springs by eminent domain and kicking out the French corporation in its a$$. Then you’d see the Hillsborough River run free. Perrier my patootie. Perrier has good old Florida spring water in it. Might as well call it “Cracker Springs” water.
I won’t drink ‘Perrier’, but I might drink ‘Cracker Springs’ water.
Actually I won’t drink either. Bottled water is stupid, unless you live in a place with nasty water, and I don’t.
My water is nasty… Britta filter…. cleans the water at 1/1000th the cost of bottled water.
Yep - Britta is the way to go. Much cheaper and you cut out all the plastic bottles.
“I can’t stand water because of the things fish do in it.”
W.C. Fields
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This dude is an idiot. He just sent 20 grand to Money Heaven and he’ll never see it again……R.I.P., $ 20,000, it was nice havin’ ya pass thru town.
He goes out and hands over 20K for an unbuilt Florida crackerbox in the middle of nowhere. He didn’t have to. They have been putting people into brand new homes down here with nothing but an ink pen and some paper on the table.
Also, Groveland is an appropriately named place. It is in the middle of thousands of acres of citrus. They don’t have much infrastructure to speak of up there. You gotta drive 40 miles away from there to get to a decent sized strip mall.
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20 grand to Money Heaven - I like that!
Les, you’ve got Groveland nailed all right.
Yes, he does have Groveland spot on. As a resident of Lake County, Fl (an “underdeveloped” County would be an understatement.) I see Groveland as the middle of nowhhere in the middle of nowhere. If I did not ride my bike through back roads, I would never have found these developments (Oh, yes, there are more than one there, more like dozens and all have grand names like ” _______ Reserve.”
An inkpen? Wow. I haven’t heard that one since I lived in Baltimore.
In a box somewhere I still have the Shaeffer I learned to write with about 60 years ago. Has a screw-on cap and a swirly design on the plastic case. I remember that black or blue ink was a big deal and everyone ruined at least one shirt from a leaky pen. Some years back, people with too much money and time were buying fancy Mont Blanc fountain pens, but I don’t see them anymore.
In NC in 1990 my boss warned me about buying into a new development, particularyly being the first or one of the first. Folks act like builders going bankrupt is a new, special event to this housing bust. But it isn’t, builders go bankrupt all the time, hence the warning. The only unusual thing is that its usually not the top tier builders. But those firms bought out a lot of the little guys during the boom.
Good analysis, Renter. That’s exactly why I insist on seeing what I’m buying, so I prefer a house with a few years on it, in an established neighborhood.
Builders going bust is nothing new, as you’ve said. The difference here is the scale of the failures due to the bubble. In fact, in my experience, contractors both large and small are notorious for operating on a bit of a Ponzi model. That deposit you give a roofer or mason today usually goes to pay off the bills on his last job, that’s why they’re so insistent on “deposits” and that’s why the most relief you’ll ever see is the look on a contractor’s face when he gets the “deposit”. Don’t buy the crap about “materials”. If they’re any good, they usually have an account somewhere where they can charge. In fact, you can offer to go with them and pay for the materials outright yourself, because, heck, I certainly wouldn’t want lack of materials to keep the contractor from getting started on the job. Always keep these guys on a short leash. Pay ‘em up front, they won’t show up. Pay ‘em at the end of completed stages of the job, they’ll keep working.
Yeah, like one down in Riverside in 1972. First they boarded them up as the tenents lost the property and then they put them back as section 8 housing thus killing off the remaining property owners. Soon it looks somewhat like a ghetto. What association? That goes as the supporting homeowners move on.
Hmm there is a neighborhood called Turtle Creek in an adjoining city. I wonder if there is ever a creek, or tutles… You have to love the names of the neighborhoods.
“one of America’s legendary homebuilders”
– I guess that means this was the Levitt who built the various incarnation of “Levittown.” (PA, NJ, NY? others?) The magnitude of the current housing problem is highlighted by the demise of this building outfit, which survived many previous downturns.
“one of America’s legendary homebuilders”
—————————————————–
Legendary ? Like Abraham Lincoln ? or Babe Ruth ? or General Robert E. Lee ?
Legendary ? A housebuilder ?
LOL !!!
……………………………………………
Titanic was legendary too.
They were a legend, before they drove their first nail….
[in their coffin]
“‘You can’t take a chance,’ said Ron Miller, finance administrator for Pinellas Park. He withdrew $14-million from the state pool Friday and is considering what to do with the remaining $8-million in city funds held by the state. ‘The primary thing we’re doing is securing the money. The return is a secondary goal. … We may pull more in the next day or two.’”
Sounds like a bit of a panic to me, but the guy has his priorities straight. Secure the money first, then decide where you can get some sort of safe return.
You know what is scary though? If Bloomberg hadn’t done a little (and I mean very little) digging, these guys wouldn’t even know!
So these guys got their information from Bloomberg? I had no idea. That IS scary. I guess they depended on the ratings services, like so many fund administrators. My sis has done some consulting work for a couple of small hedge funds and I was discussing with her some of the info I got from the blog, where public and private pension money had gone into hedge funds, thereby putting pensions at risk. Her response was that ultimately, it is the fund administrator’s responsibility to keep a watch on things and that if people lose their pension money, don’t blame the hedge fund managers, blame the fund administrators for placing the pensions in the hands of the hedge fund managers in the first place. I gathered that was the attitude of the managers in general, that their business involved risk and if you can’t stand the heat, get out of the kitchen.
I spent nine months this year screwing around in that ballpark. The backscratching is unbelieveable.
I’ll resist.
Bloomberg is one of the few news TV stations willing to do a little investigative reporting today. I guess everyone needs their niche!
Got popcorn?
Neil
They’re my “default” channel on Sirius.
Shouldn’t they be digging elsewhere? How about the hometown and state, NY?
True Ben.
These spurts of selective financial shenanigans and the loss of control of this information from the housing and hedges funds rackets are the last things that the con men want to trickle out.
Information on our CONS IS DANGEROUS to OUR PROFITS
The primary thing we’re doing is securing the money. The return is a secondary goal. … We may pull more in the next day or two.’”
That quote jumped out at me. Now with my blackboard math lets multiply these little withdrawals times every little town and city across America. Do all these cities use leverage? Uh Oh.
Ouro — good point. Cities have a network for their city managers and finance directors, so presumably word of this has spread far and wide. I have no idea how the scale of money these people control compares to the huge flows that are pushing T-bill interest down, but wouldn’t be shocked if these moves are a noticeable factor. The “Dummm da dum, dum” music from Dragnet comes to mind.
I believe it was Mark Twain who said, “I am more concerned with the return OF investment than the return ON investment.”
And that’s what one of my wealthiest friends used to tell people. They were forever urging him to put money into the stock market, but he was a Treasuries guy through and through.
In the long run, his strategy worked out just fine. He’s one of our town’s foremost philanthropists, and a nice guy to boot.
i believe it was WIll Rogers
“At Jesup’s Reserve, the pool and cabana are off-limits because construction is incomplete. A ‘No trespassing’ sign warns residents that the area is a construction site and that entering it without permission is a felony. Resident Maggie Martin fears a closed cabana and pool will be ‘a tremendous drain’ on property values.”
Whenever I buy a house, the 1st thing I check out is the cabana…
No cabana, no go.
I think I’ll get my bulldozer license. I suspect bulldozer operators are going to be very busy, soon, plowing under the cabanas and pool houses.
“With only 72 employees left out of about 500, Levitt and Sons ‘just does not have the resources to continue to serve as intermediary,’ said Paul Singerman, lead bankruptcy counsel for the builder.”
Sooner, rather than later…
The hoi polloi is going to revolt against big business, in a big way.
Most family businesses are destroyed by the second or third generation. Business acumen is definitely not hereditary.
Soon it will be just Levett and son.
Off topic; I heard the State of California will try to freeze reset rates for loans about to reset. Anybody heard anything about this? Can the State do that? If this is true it sounds like the fix is in…
California would be better off getting the correction over with. Drawing it out will only make it more painful. How quickly do you remove your bandaids?
Applying painful medicine is not the strong suit of most politicians, which is how we got here in the first place.
(Probably applies to “I think we need to spend less” comment in the bucket, too. )
Ben: Happy Thanksgiving - reminds me to be thankful for your blog and all I’ve learned. My question is are they going to include 2nd homes, flippers, speculators, people that refied and took their equity out, and people that lied about it being their primary residence to get a lower rate? It’s my contention that once you remove all those loans, there’s not much left to save.
The WSJ print edition has something today about Schwarzenegger’s office reaching an agreement with C’wide and two other lenders, to postpone resets for owners who can only afford the teaser rates. C’wide’s material interest in this is obvious, they don’t want people sending in the keys en masse. The state’s role may be to help “assess” which FB’s “can only afford the teaser rates” — look for a whole new bunch of BS financial counseling to advise people how to qualify as the “I can’t afford it” types. And FB’s who “can” afford it will be angry that they didn’t lie so egregiously on their mortgage applications!
Sorry, I think I saw it in NYT not WSJ. (Not saying it isn’t in WSJ as well)
…… and, of course, the concept of “affordability” is a bit questionable anyway.
My attitude is that you PAY THE BILL if you owe it.
If that means selling assets, getting a second or third job, whatever, it’s your responsibility. If you cannot or WILL NOT make the payments due, then surrender the house and get it over with.
Either way the mortgage asset loses value on the banks or investors books begetting yet more writeoffs.
So, they freeze the rates at “teaser” rates. Do they allow the lender to avoid marking the asset to market too? They must realize that a bond that doesn’t pay anywhere near market rates will have little value.
Will the IRS step in? Giving out a loan at below market rates usually constitutes income. What a can of worms. Foreclosure is so much more efficient. The lender gets what they deserve and so does the borrower.
“Maybe they should have saved a little harder when work was plentiful.”
Bingo. I’m an electrical contractor and I saw this disaster coming over two years ago. I paid off all of my debts, started paying C.O.D. at the supply house, and laid back a year of expenses in a savings account. Unlike my competitors I’m prospering during these slow times. Not getting rich but it’s better than going broke.
Swordsman, if you were in Tucson, you’d be MY electrical contractor.
Does anyone want to punch shumer in the head or what-The Freddie development also puts into deep freeze Congressional attempts to raise the fannie/freddie loan limits and the portfolio cap. Just this past week, (Sen Charles) Schumer and others were working on passing these provisions. That will be over for a while.
Did anyone intervene when prices were skyrocketing. How did NY’s vote for this guy. KEEP THE LIMITS.
KEEP THE LIMITS
Dump the GSE’s…
“Dump the GSE’s…”
Yes. These are ugly gov/private Frankenstein monster hybrids where taxpayers get none of the benefits and all of the liability.
“The larger one — 853 acres for $15 million — is roughly $5 million below two appraised values from March of this year. The land last sold for $5.4 million in 2005, according to Ellis’ office.”
- It sounds like someone is giving the city the ‘Big Lebowski’.
Can anyone say cash ‘Kick Back’.
That’s exactly what I was pondering - “Cui bono?”
Is my watch fast, or did the NAR just miss the 10:00 release time for metropolitan home sales data?
“Some metro areas are hot while others are experiencing localized problems,” Lawrence Yun, the group’s chief economist, said in a statement. “Home prices in the vast midsection of America, from the Appalachians to the Rockies, are affordable and, perhaps, even undervalued.
When did Baghdad Larry turn into Flyover Larry?
xang it! c0ffee 0n the keyb0arx. glax new 0nes are cheap. yun is a real c0mic!
Avert eyes when tipping liquid to face!
Leigh: I’ve learned to set laptop aside when ingesting liquids.
“Home prices in the vast midsection of America, from the Appalachians to the Rockies, are affordable and, perhaps, even undervalued.”
Ah, but prices are rising strongly in many markets according to the NAR. It’s a great time to sell a house!
The sad truth is, even if the NAR were compiling the data fairly, they would report rising medians as the bottom 9/10 has dropped out of the market. As they continue to report high prices while no one can sell, their credibility will fall further. But it couldn’t happen to nicer guys.
Parts of the employment-challenged vast midsection of America have home prices that are both affordable and overvalued.
As they continue to report high prices while no one can sell, their credibility will fall further.
What credibility? The NAR lost that long ago!
Yea………..and I’m “undervalued” by my employer.
What do you think it will get me if I tell them so?
A pay raise!
Yun must be talking about the “metro” area of Greensburg, KS . . . building is booming right now.
Not because everyone wants to live there, but because it was flattened by a tornado this summer. Construction permits are probably up 5000% or so!!! You see, there are pockets of strength.
“The developers of Downtown Dadeland are walking way from the massive mixed-use project in Kendall and handing over the unfinished complex to construction lender Goldman Sachs Commercial Mortgage.”
And presto! Goldman is now in the property development and leasing business. LMAO! They can’t even run a decent fund and now they’ve got to mess with bricks and mortar? Well, at least until they find a willing buyer to unload to and who wants to bet Goldman won’t come anywhere near recouping their investment. Oh, well, 224 mil is just a drop in the bucket for them.
“‘It is a friendly handover,’ said Johansson, principal of South Miami-based Gulfside Development. ‘We have been helping them in the transition for almost a month. There are no bad feelings, and we wish them good luck with a beautiful project.’”
Dang. This guy sounds like he just won the lottery.
He did in a way and he knows it.
“Today Brevard County can complete a whirlwind month of major acquisitions by the Environmentally Endangered Lands program. County commissioners will review two deals to buy a combined 1,500 acres for conservation in Scottsmoor for $24.2 million.”
“But Clerk of Court Scott Ellis plans to repeat his concerns about other recent deals. He argues the county is paying peak prices in a down real estate market, and that appraisers have made wrong assumptions about the properties’ development potential.”
Here’s a look at today’s proposed Environmentally Endangered Lands program purchases, according to the sellers’ names:
AG Ventures LLC and Honeybrook Development Corp.: Size: 669 acres (450 uplands, 219 wetlands)
# Appraised values (June 2006): $9.22 million and $8.95 million
# Sale price: $9.16 million
# EEL price after grant: $7.66 million
Scottsmoor Partners LLC:
# Size: 853 acres (674 uplands, 179 wetlands)
# Appraised values (March 2007): $20 million and $19.6 million
# Sale price: $15 million
# EEL price after grant: $13.5 million
Does this need any further comment?
“Does this need any further comment?”
Yes. Lemme tellya what happens down the road. Gov gets all nervous and jerky about their “budget” (which I call a “botchit”) and sells the land off for a song to private foreign interests like the government of Dubai or Tropicana and pat themselves on the back for “returning” money to the taxpayer. Think I’m kidding? Governor Crist got all moist with delight about Dubai wanting to build a huge media center here and has been trying to assist them in finding a large piece of public land on which they can locate the media center. ’scuse me. I have to go empty my barf bag.
Who did the appraising?
“But Clerk of Court Scott Ellis plans to repeat his concerns about other recent deals. He argues the county is paying peak prices in a down real estate market, and that appraisers have made wrong assumptions about the properties’ development potential.”
“‘We’re paying far more for property then it’s worth,’ he said. ‘Why do we have to rush these purchases through?’”
Because there’s probably something in it for one of your county commissioners or high officials, that’s why. By all means, object, but don’t go walking on the beach alone at night.
You’ve just described the Palm Beach County Commissioners, palmetto. Some are working on their bodybuilding right now, in fact, at some of our finer penal establishments.
A couple of Hillsborough County Commissioners aren’t too far behind.
“The developers of Downtown Dadeland are walking way from the massive mixed-use project in Kendall and handing over the unfinished complex to construction lender Goldman Sachs Commercial Mortgage.”
I hear those GS construction guys will have it done, in a jiffy.
Treasuries Rally as Stocks Drop; Ten-Year Yield Falls Below 4%
Nov. 21 (Bloomberg) — Treasuries rallied, sending 10-year note yields below 4 percent for the first time since 2005, as a decline in global stocks spurred demand for the safety of government debt.
Bonds rose as U.S. equities fell and oil increased to within 71 cents of $100 a barrel. The spread, or difference in yield, between two- and 10-year notes widened to the most since early 2005 on speculation the Federal Reserve may have to lower interest rates again even as inflation accelerates.
“What we’re seeing is a panic demand,” said David Ader, head of U.S. government bond strategy in Greenwich, Connecticut, at RBS Greenwich Capital. “Liquidity is a great problem.”
“David Ader, head of U.S. government bond strategy in Greenwich, Connecticut, at RBS Greenwich Capital. “Liquidity is a great problem.’’
Ader, may I suggest a good enema. That should solve your “liquidity problem”.
interesting summary of Taco Bell Jeff’s adventures:
http://foreclosureavoiderssavedme.blogspot.com/2007/04/rise-and-fall-of-jeff-from-sdcia.html
This is about a 350% return (albeit “on paper”) in roughly 20 months of investing.”
It’s the “on paper” part that always ends up the azz-bite.
(A Florida realtor told me back in the mid 1990s that HOAs benefit mainly developers/builders and local govs. There’s more profit for the developers and for the local govs, HOAs absolve them of a certain amount of responsibility such as maintaining interior roadways, tree trimming, trash removal, etc., depending on the region. And yet they still get the same amount of taxes from the homeowners. What a racket!)
It is a racket not all understand. In much of the country, these “private governments” substitute for the real thing. Why? Because an actual local government would be obligated to provide the same services to the exclusive gated community and the trailer park down the road. By having fewer public services and more private ones, the exclusive gated communities get parks, pools, libraries, snow removal, well paved streets etc without any redistribution of resources to less well off parts of the same jurisdiction.
What if the gated community isn’t so exclusive anymore? Well perhaps the better off parks of the private communities can just seceded from the less well off parts. Good luck.
“The budget calls for $18,000 a month to be spent on landscape maintenance.”
There you have it.
All of the “hassle-free boomers” shouldn’t forget about the neighborhood teenagers. They charge much less than $18,000 a month and skip work just as often.
Sorry, the boomers are moving into gated communities that don’t allow teenagers. I don’t know how it works, I thought age discrimination wasn’t allowed, but it seems to be flourishing.
A number of years ago the fed govt passed a law specifically allowing 55-up communities.
I’d like to live in a community without old people driving like maniacs
You can’t discrimanate against old people, but you can discriminate against young people.
In Free Societies, you can discriminate against anyone for any reason……..that’s what the definition of freedom is. You are free to choose.
True — Freedom of Association - a term probably shown as “archaic” or “obsolete” in the dictionary.
Comment by droog
2007-11-21 08:24:07
‘There are several large-scale projects under-way in Palm Beach Gardens, near where I live. I can see these becoming huge dust bowls soon. The shame is that the land used to be covered with dense vegetation and was great to trap through, looking for fauna.
Florida - the new dustbowl state.’
So sad.
We had a beautiful forest; wetlands, giant trees, heavy undergrowth, down on Mud Bay road before RDWhoreton razed it to the ground. They want to put in, I think, 300+ houses? I can’t remember–so many craptastic projects, the hideousness kinda runs together–oh, and on top of an aquifer recharge area, too, that downslope residents in Olympia use as a drinking water source.
Sigggghhhhhhh.
I’ve mentioned this particular project before on this blog, but I’m not going to rant now. I will simply content myself with praying to Baby Jeebus to deliver my holiday wish. That a displaced Bigfoot finds and eats all the DRWHores. Alive.
That would be a lot of effort for one shy anthropoid, it is true. Okay, then, a troop of them. With chopsticks, because that would take longer.
Olympia, Florida has the same problems, although the flora, fauna and topography is different. But in its own way, it has a subtropical natural beauty and ecosystem that is wonderful and is being destroyed.
I hear you, palmetto & Olympia! The abomination (I mean, “subdivision”) erected by M/I Homes in Palm Beach Gardens destroyed some a preserve area. Just last year I could see tons of fauna on my run - armadilloes, raccoons, gopher tortoises, turtles, snakes, herons, egrets, etc. Now, thems that can fly have beat a hasty retreat to the nearby dump, while thems that are afoot have become roadkill. In the place of the once-beautiful preserve is tons of dustbait.
It gives me this kind of feeling:
BOWED by the weight of centuries he leans
Upon his hoe and gazes on the ground,
The emptiness of ages in his face,
And on his back the burden of the world.
Who made him dead to rapture and despair,
A thing that grieves not and that never hopes,
Stolid and stunned, a brother to the ox?
hey there Palmy
Oh yes, Florida wildlife is very beautiful indeed. When my retiring Air Force father yanked us all down to Sarasota in the 70’s, I used to take long nature in solace to ease my mind over the move. The vegetation & native critters are something else, even enjoyed the gators in the local ponds. Snapping turtles sunning themselves on the Hillsborough river, while paddling in a rented canoe later in life, was also very cool.
My neighbor freaked out though when I stumbled accross a large group of small plantings & brought one back for him to examine. He kindly informed me it was a pot farm, take it back right away, watch out for booby traps, & steer clear of that area as them people dont mess around with intruders. (rather exciting for young teen . . . )!
OT: while driving around yesterday I heard a newscast saying that people are starting to miss car payments and some finance companies are starting to worry. Time to watch local credit union parking lots for repo’s to assess how deep their losses might be. Would also like to know how involved the credit unions were in the 2nd mortgage market or HELOC business.
Buffett just bought stock in CarMax, largest used car dealer in the U.S. A lot of the bling you see on the roads is going to be on the lots.
oh yes - I remember those credit union parking lot repo sales … wow! good comment salinas ron, in fact they faded away as the bubble started.
The few times I stopped to look at the price in the windshield they were the same as normal retail, so where it the bargain? whats the diff? why should I take a chance on an obviously repo’d car which was probably poorly maintained for full retail??
Financial institutional greed knows no limits, respects no morals, and makes no apologies.
But if or when individuals act in their own financial best interest they are bombarded with insulting messages from the shills in the industry about ” doing the right thing”… ” pay your bills” etc etc !!
Amusing how corprocrats demand moralistic behavior for people but act like their corp is some nameless, faceless bidness that no one has responsibility for running. I mean, c’mon ; a corporation isn’t run by a robot (yet), its made up of people, so this ruthless take no prisoners creed is just an excuse for overagressive type-A Beamer drivers to apply the screws to their fellow man under pretense of ” bidness”.
” nothing personal, its just bidness” is such an overused BS phrase to cover a multitude of sins.
( well mr ceo, nothing personal, I just effed yer trophy wife. just business, ya know.)
rant off - for now. hmm maybe I should switch to de-caf . .. .
Check out the movie “the Corporation”. Claims if Corps were people, they’d be classified as sociopaths. It’s an entertaining (but somewhat long) flick.
“The sociopathic personality is irresponsible, manipulating, grandiose, lacking in empathy, has antisocial tendencies, refuses to accept responsibility for its actions, and cannot feel remorse.”
http://www.amazon.com/review/RAF8IGRQOON0E
Saw the funniest signs on a bulldozed area off State Rd. 70 in Bradenton. I need to go back by and read it all, but the sign for a new development (apparently going nowhere) says “financed by….” couldn’t read who financed it because someone had spray painted GREED over the name. While I don’t endorse vandalism and most of all graffitti, I couldn’t help but cheer on the vandal!
Oh yes, lizzie, people in FLA are getting good and pissed. Hence the drive for hometown democracy.
lol
it’s unanimous escpt VT
they had 3 sold ,up from 2
http://biz.yahoo.com/ap/071121/home_sales_realtors.html
“they had 3 sold ,up from 2″
LOL.
We’re just kind of in limbo here and waiting to hear
Did I hear LIMBO? Everybody limbo! How looooow can you go??
la-la la la la-la la-la, la-la la la la-la la-la
I was out for a while….is it still contained ?
BAHHHHHHHHHHHHHH
“Home Prices Decline in One Third of U.S. Metro Areas ”
http://www.bloomberg.com/apps/news?pid=20601103&sid=awm8nbo5zv88&refer=us
It says that Palm Bay, FL had the biggest YOY price drop. They also have the greatest amount of sales activity. Gosh. Lower prices. More sales. Lower prices more sale. I think we have something here.
Florida’s Housing Market for 3Q 2007: Sales Activity Remains Soft
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/11-21-2007/0004710014&EDATE=
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/11-21-2007/0004710014&EDATE=
Uh-Oh…
Freddie Mac woes may hit Countrywide May? Right!
“‘You can’t take a chance,’ said Ron Miller, finance administrator for Pinellas Park. He withdrew $14-million from the state pool Friday and is considering what to do with the remaining $8-million in city funds held by the state. ‘The primary thing we’re doing is securing the money. The return is a secondary goal. … We may pull more in the next day or two.’”
Sounds like somebody bought $14 Million worth of T-Bonds…
“‘We’re just kind of in limbo here and waiting to hear,’ said Vincent Santanelli, a resident of Cascades at Groveland who helped his elderly father-in-law with a $20,000 down payment on an unfinished house in the Lake County community. ‘We haven’t even heard a word from Levitt.’”
No problem…
Just call 1-800 PURGATORY
For a fast, full refund. (plus accrewed interest, but of course)
I just returned from Naples area with my son. He is 25 and has never been through a real downturn. I pointed out all the commercial projects partially completed with weeds growing up all around them and no signs of life.
I explained that this is very much like 1973-1975 when we had gas prices zooming, construction crashing and basic liquidity issues. Oh my!
By the way we were still absorbing that excess inventory into the mid 1980’s. That was a grain of sand on the beach what we have now is the mother of all BEACHES!