An Adjustment Was Due In California
The Sacramento Bee reports from California. “After months of wrangling with lenders over huge debts accumulated during the housing boom, prominent Sacramento-area home builder John D. Reynen filed Wednesday for personal bankruptcy protection. Analysts say the value of thousands of acres the company bought at high boom prices three and four years ago has collapsed at the same time the firm’s home sales have fallen. The company has since halted much of its home building.”
“Reynen & Bardis also has been embroiled in recent controversies over allegedly defective homes in Rancho Murieta. In Elk Grove the builder and its related entities owe nearly $2 million in back property taxes and fees.”
“In court filings, the bank asserts that John Reynen and company co-founder Christo Bardis personally guaranteed more than $750 million in loans to various lenders and have failed to pay them. That means lenders have the right to seize their personal property.”
“‘That’s what Bank of the West did in February, filing a writ of attachment to seize homes owned by Bardis and his wife, in Gold River, Pebble Beach and Los Angeles; and homes owned in Sacramento, El Dorado Hills, Truckee and Mendocino by Reynen and his wife.”
“Reynen’s bankruptcy court filing estimates the number of creditors at 1,000 to 5,000 and puts his personal assets at between $50 million and $100 million. It estimates his liabilities between $500 million and $1 billion.”
“Spokewoman Michele McCormick said the firm controls 18,000 home-lot acres in California and Nevada.”
The Fresno Bee. “Reynen is the latest home builder to hit rough water in what Jonathan Dienhart, who tracks sales for Hanley Wood Market Intelligence, called a historically significant downturn.”
“Dunmore Homes of Roseville filed for bankruptcy protection in November and then started liquidating assets, leaving a subdivision in Dinuba unfinished. And Lafferty Homes of San Ramon abandoned a tract in southeast Fresno a year ago, leaving two dozen houses unsold.”
“‘It’s not unique,’ Dienhart said of the Reynen bankruptcy filing. ‘And lots of times it has to do with the financing side of it.’”
The Bakersfield Californian. “The developer behind southwest Bakersfield’s planned McAllister Ranch golf course community has defaulted on a $235 million loan against the property. The planned 6,000-home neighborhood is also beset by lawsuits and legal filings alleging unpaid construction bills.”
The Ventura County Reporter. “What a difference a recession makes. Within months of a gala celebration marking the groundbreaking of the much anticipated Working Artists Ventura project, backers of the much-anticipated $57 million cultural hub have found themselves scrambling for millions of dollars still needed in construction financing.”
“It will feature 69 affordable housing units serving low-income families and individuals. Another 15 will be reserved for recently homeless individuals trying to make a fresh start. Thirteen ocean-view condominiums, meanwhile, will be sold at market rates to help pay for the project.”
“‘It’s disappointing news because I really thought with so much government influence on the project it would at least be able to carry the momentum,’ says Doug Halter, a two-time city council candidate who…helped conceptualize the project. ‘I think one of the best things on this project was the win, win, win.’”
“‘I know from construction financing typically that if there’s any construction going on at the site then they’re very reluctant to extend any new financing,’ Halter says. ‘It definitely concerns me because this is a pivotal project for Downtown. As a community, as a government we really have no regard for the impact of time on economics.’”
“Halter says he and other critics of the city’s slow planning process ’saw the writing on the wall’ about the economic slowdown. ‘We knew that we had a short period of time. That was the longest economic, prosperous time that I knew of in my lifetime,’ he says.”
The Glendale News Press. “Gabriela Walsh, a Valencia resident who works in Glendale, had her heart set on buying a condo at the Americana at Brand — until she learned it would cost her more than $700,000.”
“‘That’s a bit out of my range,’ Walsh said. ‘For that location, I would say give me a beach view and I might think differently. I think that for sure I’ll rent indefinitely.’”
“The highest priced condos are 2-bedroom, 2 1/2 -bath units. While the same approximately $2-million investment could fetch some of the most luxurious single-family residences, equipped with pools, private yards and up to five bedrooms in the Glendale hills, Rick Caruso, Caruso Affiliated CEO, says that built into the price tag of an Americana condo is a lifestyle and living experience that’s beyond comparison to other properties in the regional market.”
“‘It’s a different world now out there because there is nothing like the Americana or the Excelsior to compare it against, not only the quality of the units and the way they’re fitted out, but also to be in the environment where you’ve got the restaurants, you’ve got a park to be at, and it’s all in this beautifully landscaped, safe environment,” Caruso said.”
“And according to Caruso, there’s plenty of initial interest. Rob Miller, who lives in the San Fernando Valley and works in Glendale, is not one of them. Nor does he believe there’s real interest in the Los Angeles region among deep-pocketed buyers to move to Glendale.”
“‘In today’s market, who’s going to live there?’ Miller asked.”
“Price aside, Roger Powell wondered who would want to live above a shopping mall. ‘We were discussing yesterday how annoying it would be to live above The Grove,’ Powell said.”
The North County Times. “North County’s new condominium market is so slow that some developments have decided to shift their focus away from sales. Facing a market with few to no buyers, some complexes have implemented rent-to-own programs. Others are tossing in freebies.”
“Escondido fared the worst in the first quarter, posting ‘negative 12′ sales, meaning 12 more people canceled contracts than closed escrow, according to a report by MarketPointe Realty Advisors.”
“‘It’s getting worse and worse. They (buyers) are reading the news and they’re holding back,’ said Sandy Ramirez, sales director for a complex in Escondido. ‘I’d say 99 percent of the people who walk through the door really like the product. But they don’t know if they can get a better deal in six months.’”
“The only new project in Escondido was City Square, built by Barratt American. Though the builder has added incentives and is willing to negotiate on price, slashing price tags is not in the plans, said Michael Pattinson, president of Barratt American.”
“‘Lowering prices is a double-edged sword. If you’re in a market where the average price was $400,000, and you start selling at $300,000, you just wiped out a lot of people,’ he said. ‘They now have negative equity. Every time I or somebody else drops the price, we’re adding negative equity and negative equity is very damaging to consumer confidence.’”
The Daily Breeze. “Nearly all the homeowners who seek the services of Realtor Joyce Reese these days are in a hurry to sell. ‘Pretty much that’s all you get,’ said Reese, who sells homes in Carson and Compton.”
“In the South Bay, foreclosures have mostly hit inland areas such as Carson and Gardena, where first-time homebuyers often purchased homes they couldn’t afford, using little or no down payment.”
“For example, in March, the number of single-family homes sold in March in the South Bay - excluding Inglewood and the Palos Verdes Peninsula - dropped by more than half compared with a year earlier, with inland areas the hardest hit, according to the South Bay Association of Realtors.”
“For those needing to sell quickly, they often find that buyers are scarce and in no hurry to act, Reese said.”
“‘Unfortunately, their time periods (to sell a home) get stretched out for a real long period of time because unless you really price it low, you really can’t get it sold,’ said Reese. ‘Not a lot of buyers can qualify for what the lenders set for them.’”
The Whittier Daily News. “First the good news: Home sales in the San Fernando Valley increased for the third consecutive month in March, according to reports released Tuesday. But now the bad: Sales and prices remain in a free-fall and foreclosure woes show no signs of easing anytime soon.”
“From Glendale to Calabasas during March, 642 properties changed owners, down 52 percent from a year ago, according to the San Fernando Valley Economic Research Center at California State Northridge. The median house price fell an annual 19.4 percent to $500,000 - while foreclosures in the Valley soared nearly 200 percent from 2007.”
“The Valley’s foreclosures accounted for 22.5 percent of a record 2,267 across Los Angeles County, according to DataQuick. DataQuick’s March foreclosure report suggests the problem will worsen before it gets better. Last month, 1,553 property owners received default notices, a 142-percent increase from 642 a year ago. Meanwhile, buyers are seeing lower prices on a daily basis.”
“In the Santa Clarita Valley the median house price fell 19 percent to $470,000 and sales fell 42 percent from a year ago to 151 transactions. Condo sales dropped 52 percent, to 54 transactions, and the median price declined 28 percent, to $275,000.”
“Jim Link, executive VP of the Southland Regional Association of Realtors, said a lot of potential buyers are hunkering down to see how far prices will plummet. ‘An adjustment was due. This has happened historically in the market and the price decline is not something that is overly alarming because we’re coming down from a record high,’ he said.”
The Press Enterprise. “In California, trustee’s deeds, which denote the actual loss of homes to foreclosure, totaled 47,171 in the first quarter. That was the highest level of foreclosures since DataQuick started tracking trustee’s deeds in 1988. In Riverside County, 6,519 homes went to foreclosure, up almost 347 percent from a year earlier and setting a record for the fourth consecutive quarter.”
“In San Bernardino County, 4,523 homes were foreclosed on, up almost 398 percent from the first quarter of 2007 and hitting a record for the third consecutive quarter.”
“‘For the first four months of 2008 we were clearly in a recession,’ said Inland economist John Husing.”‘
“Foreclosures are going to get worse because the factors causing foreclosures are moving in the wrong direction,’ Husing said. ‘Housing prices are coming down, mortgages are adjusting up, unemployment is the highest it has been in this decade and gasoline prices and food prices are soaring.’”
“Los Angeles-based economist Christopher Thornberg said a ‘vicious cycle’ has developed in which falling home values fuel foreclosures, which in turn cause home values to decline further.”
“‘The bad news is that there will be a massive decline in home prices,’ he said, while the better news is that the flow of people who leave the state in search of more affordable housing will come to an end. ‘California will become a cheap place to live again,’ he said.”
The Visalia Times Delta. “Jodie Woodsmith, a real estate attorney who heads weekly mortgage-counseling sessions, says her office receives dozens of calls daily from Tulare residents who’ve found themselves in over their heads on mortgage payments.”
“‘There’s a real lack of education out there,’ Woodsmith said. ‘It’s like new-car syndrome. Unfortunately, many people just wanted the loan so much they just signed whatever was put in front of them.’”
“Most of the loans that went into default last quarter originated between August 2005 and October 2006. The median loan-age was 23 months, up from 16 months a year earlier.”
“Woodsmith said one couple she counseled recently had a $300,000 loan, even though both were line workers in a minimum-wage industry. ‘That was a loan that was destined to fail,’ she said.”
The San Francisco Chronicle. “Late last year, Congress, President Bush and the real estate industry hailed the Mortgage Forgiveness Debt Relief Act of 2007 as a boon for struggling homeowners who might face a big tax bill if they restructure or give up on their mortgage.”
“But like everything that comes out of Washington, it is full of fine print that borrowers should fully understand before they decide how to get out from under debt they can’t repay.”
“If you took out a home equity loan and used the money to buy a car or pay bills and the home equity loan is forgiven, you will owe tax on it. Likewise, if you refinanced your home for more than the original balance and did not use the additional loan proceeds to improve the home, the extra amount would not qualify for the tax break.”
“‘If you refinanced at all and used the refi proceeds to pay off credit cards or buy investment properties, it helps you little or not at all,’ says Richard Tomlinson, a CPA in Pittsburg.”
“Tomlinson did a tax analysis for a client who was contemplating a short sale on his home. The client bought the home seven years ago for about $300,000, refinanced it several times and now owes $650,000. Very little of the increased debt went into the house.”
“He was considering selling the house in a short sale for $400,000, which would repay the original $300,000 plus $100,000 more. The lender would forgo the remaining $250,000 in debt, but because it exceeded the amount the owner borrowed to buy or improve the house, it would have been taxable.”
“He would have had to pay $70,000 to $88,000 in federal tax, plus state tax. ‘After I did the analysis, he decided not to do the short sale. He’s going to stay in the house and tough it out,’ Tomlinson says.”
“Tax-wise, some clients might be better off going through a foreclosure than a short sale, Tomlinson says.”
‘We were discussing yesterday how annoying it would be to live above The Grove,’ Powell said.”
I have never been there, but there was a big article in the NY Times today about The Grove, saying how great it would be to live in this new Glendale development, The Americana. The Critical Shopper was comparing it to living in a real city, like Manhattan….
http://tinyurl.com/5abuk4
Only by people who’ve never actually lived in Manhattan.
Here in San Jose our fake town with overly expensive housing on top is Santana Row:
http://www.santanarow.com/apts/townhomes.php
Of course its mobbed with gawkers, posers, and wannabe cougars the entire time.
and no grocery store, no pharmacy. just high end restaurants starting at $15. Its great to live in a multiuse, village; but what about providing services for people living there. So you have a pedestrian oriented lifestyle, but you got to jump in your car to get milk. Bay Street Emeryville (CA) and Sugar Land Town Center (TX) the exact same thing.
Live there? Need groceries? Pharmacies?
What a strange concept!!!
I figured all we need is totally “high end” concept locations that sell Louis Vuitton bags, and Rolex watches, and everything else will just take care of itself.
and don’t even think about a hardware store!
Our hardware store on Larchmont just closed - some a$$ developer bought their building and ended their lease. I almost cried. They had pretty much everything. They weren’t struggling as a business, as far as I know. Horrible. Now I have to drive to Home Depot or OSH, argh.
my condolences. hopefully a$$ developer will go broke (and to debtor’s prison…) and some useful businesses will take a$$’s place.
I was so sad to read about what’s happening to Larchmont in CurbedLA. I used to work there and it was so perfect and charming. The hardware store had everything. But cheer up - now you have overpriced cupcakes coming.
just the sound of sugar land makes my skin crawl
nothing against sugar or land
There is a Target store inside the Glendale Mall which is right across the street from the Americana. Like the article, I had the same conversation with my wife as who would want to live right above a shopping mall with all the noises and traffic. Looking at all the conveniences that come with those condos, I wonder how much is HOA?
Satan Row is a grotesque mockery of everything that makes San Jose great. There are a bunch of real places that are nice to be around The Alameda, Race Street, and Burbank not far from there, so why does anyone ever allow themselves to be seen there? When developers really work at it they can come up with wonderful new places like Radio Hill, now called Communications Hill. When developers just want money fast the results can be truly awful.
Santana Row is one of the stupidest looking developments I’ve seen in a long time. All the more so because it’s right across the street from a kitschy and dilapidated 1950s era movie theater and the tourist trap that is the Winchester House. Most of San Jose is butt-ugly, but this takes the cake.
I’ve never been to Santana Row. I can imagine the plethora of posers there though. I see that when I go to Valley Fair. These people are walking around trying to look important but you know they’re two missed paychecks from being homeless.
Mike
Same thing. We have something similar south of Portland - Bridgeport “Village.” It’s where the Lake Oswego nouveau riche go to be seen. Bought a piece of jewelry from a small businesswoman there last year - this year, her similar pieces are priced about 25% less.
And for $2 mil, the top price for a condo at Americana, you can still buy a pretty sweet near-mansion on a fair sized lot in Hancock Park, Hollywood Hills or Brentwood, that isn’t even remotely near a mall. Not to mention what that would get you in Thousand Oaks or something.
There’s probably awesome places in Glendale for that much where you don’t have all those shopping “neighbors,” too.
Methinks Mr. Caruso is going to be disappointed by his actual sales.
Also, if you want to live in a place like Manhattan… $2 mil will actually buy you a place IN MANHATTAN.
Yeah, I just can’t see many folks with that kind of money lining up to buy a condo in Glendale. I mean, $2M for a 2-bedroom condo?
Rents look to be a little outlandish too, at $2,000 to $5,500 per month.
How horrible. I not only want to hate it, I can hate it, and I DO hate it. The only way I could hate it any more would probably be if I actually went there.
And I’ve never even lived in Manhattan.
The Grove (West Los Angeles) is a fancy two sided stripmall, with a trolleycar ride (tracks) that goes up and down the street. Its very Disneyesque and a nice place to see once or twice. Other than The Americana (a new urbanism transition), Caruso’s properties are themed fancy strip malls with beautiful landscape and frontage. The Americana is probably a masterpiece, and we’ll check it out, but what’s to get excited about.
If there’s no grocery store, no deli, no laundromat, no dry cleaner, no car care, no library, no school, no medical professional building, no police substation, no subway station, no inexpensive pizza and Chinese takeout and 7-11 within 4 blocks walking, it ain’t “urbanism” of any kind.
It’s dressed up retail BS.
Good point, and I stand corrected. I didn’t do good due diligence and you all awakened me. Thanks.
I live in Glendale and have been to the Grove plenty of times to eat and shop. My kids love the trolly ride.
This develop is about 15 years in the works. The city started acquiring the land around that time, the previous project (not by Curuso) fell through and now it is up and will be running soon.
I am happy it is here and I actually know a few people who were willing to pay up to $500,000 at the Americana for the 1 Bdrms.
However, I think Curuso has over priced time. Worse comes to worse, he may just rent them out they way he will rent out the other apartments.
On a side note, Caruso was not the original owner of the condos. The developer-partner pulled out just when construction began.
To his credit, Caruso went ahead with this awsome project and Glendale residents will benefit greatly from it.
Basing your neighborhood on crass consumption of luxury items is not a long term solution. Watch the Grove dry up and those shops exit one by one only to be replaced by discounters and ethnic food stands as our recession deepens. Starbucks crappacino drink sales are already in the dumper. The Americana is doomed to being another poster child in the overinflated dreams of the housing bubble.
And now they want to ruin dodger stadium by turning it into a retail experience with shops and restaurants and parking garages - like people who aren’t going to watch baseball will fight with 55K fans to get there so they can shop and eat - not so much. What is with turning everything into a shopping mall?
All malls are eventually supplanted by newer models. It wasn’t that long ago that the Westside Pavilion was the super-special glitzy new place in town, but last time I was there there were vacant storefronts and low-end tenants like the ASPCA. And that was probably 7-8 years ago already, I’d hate to see it now.
I’m curious to see what happens…I agree with some of your points about the recession deepening…but if any retail can get through it, it’s The Grove and Caruso’s properties. He mostly leases to established brands that can take losses in order to have exposure in his well-constructed and popular facilities. It will be interesting to see–and the success or demise of his properties will be a real indicator of how deep this recession will be…
I’m curious how old you are. The last recession I lived through was a truly bad recession in LA. Half of the retail businesses in my neighborhood went belly up, and only about half of those were replaced by low end businesses. I am already seeing vacant storefronts cropping up, and I expect to see many more as we progress. No one is going to shop at those flagship aspirational luxury brands stores once the mortgage equity withdrawals are gone. People with actual money don’t go to places like the Grove. Businesses that will do well are places like Ross and Marshalls, liquor stores, Crown Books (if anyone still reads anymore), and other discounters.
I’m fairly young, but I’m just saying that the depths to which The Grove sinks will be very telling for the economy in general…that’s my opinion. We will see…
Methinks deadmalls.com will be getting a bunch more entries soon…
You must be joking. Glendale is going to be a madhouse with that monstrosity. Enjoy pushing your kids on your stroller while all the douchebags in Beemers and Benzes stare you down and floss all night long.
Then again, coming from someone who can actually put up with the Grove’s traffic, people’s attitudes, and mess….I’m not surprised.
“I have never been there, but there was a big article in the NY Times today about The Grove, saying how great it would be to live in this new Glendale development, The Americana. The Critical Shopper was comparing it to living in a real city, like Manhattan….”
Been thru Glendale though haven seen the Americana. Glendale & Americana just cannot be compared to manhattan and never will be close to it. The financial wall st crowd just isn ‘t there. BTW; Dwtn Glendale not bad & cleaner than most LA dwtns and overall a clean tidy city. Just don’t see the big money crowd there to support a new retail ‘Americana’ main st. artificial old town concept especially in a bad recessionary climate.
I have seen this stuff in dwtn Long beach which has hyped it new pike harborwalk fun shopping-eating fun zone since it opened up in 2005 . Those retailers are running deep in the red and that entire LB funzone is running on empty fumes, though visually and asthetically Dwtn pike is really top rate in concept. The current recessionary economy is really pulling all new retail concepts such as this down hard.
I agree. I’ve lived in Manhattan and now live in LA and have worked in Glendale. I can honestly say from experience that you cannot capture Manhattan’s “urban lifestyle” in Glendale. It’s a vastly different place and demographic. And as a previous poster pointed out, for $2M buy a place in Manhattan and get the real thing!
From the article:
“You want to hate the Grove, but you just can’t,” one Angeleno friend said.
“The first rule of L.A. is to stop hating the Grove,” another said.
I am not now nor have I ever been a New Yorker or other breed of anti-LA snob; in fact, lived in the Fairfax district for nearly a decade, but I can say unequivocally that I hate the Grove even more than I hate Las Vegas, because at least the latter never decided to plunk its ugly faux ass down in my otherwise perfectly nice neighborhood.
“‘That’s a bit out of my range,’ Walsh said. ‘For that location, I would say give me a beach view and I might think differently. ”
————————-
You could “think differently”, but it still doesn’t mean you could afford it.
“Reynen’s bankruptcy court filing estimates the number of creditors at 1,000 to 5,000 and puts his personal assets at between $50 million and $100 million. It estimates his liabilities between $500 million and $1 billion.”
____________________________________________________________
1,000 to 5,000 people are affected by one guy’s bad finances…
And probably another 100,000 are affected by the 1,000 to 5,000.
And so it goes~
Yep, these mid-size builders and up are the ultimate FBs. They bid up land more than anyone. Pa-tang!
And the mid-size guys didn’t insert moolah into politicians pockets, so nobody cares about their demise…
I wondered who was buying up all that land. How long can the banks sit on undeveloped land?
Probably a long time.
You still have to pay taxes on undeveloped land
This has crept up the ladder from poor people to the upper middle class who felt they were immune to ANY economic downturn. I have clients who were making 7 digits a few years ago but now are having to file BK. NO ONE is immune to what is happening. This perfect storm is causing not only the RE market to shut down but also the inflation, and run up in other markets.
“‘Lowering prices is a double-edged sword. If you’re in a market where the average price was $400,000, and you start selling at $300,000, you just wiped out a lot of people,’ he said. ‘They now have negative equity. Every time I or somebody else drops the price, we’re adding negative equity and negative equity is very damaging to consumer confidence.’”
What do you mean greed and denial? I’m performing a public service.
Hah! They say they last saw this chump down at the beach attempting to hold back the tide.
Funny!
And if you don’t lower the price, there will be no buyers as there will be none that will qualify under the new lending standards and want to buy your property.
“‘It’s getting worse and worse. They (buyers) are reading the news and they’re holding back,’ said Sandy Ramirez, sales director for a complex in Escondido. ‘I’d say 99 percent of the people who walk through the door really like the product. But they don’t know if they can get a better deal in six months.’”
I just knew it was the media’s fault…
The problem is they _do_ know they can get a better deal in six months.
Not all towns posted negative sales. Oceanside posted positive sales and townhouse complexes fared well, posting several sales, said Robert Martinez, research director for MarketPointe.
“Positive Sales, not just one but “serveral”. Time to buy in Oceanside. btw does anybody remember Oceansides old marketing line?
Tan your hide, in Oceanside.
Tan your hide, in Oceanside
Yes, those were the good ole days in Diego.
“In California, trustee’s deeds, which denote the actual loss of homes to foreclosure, totaled 47,171 in the first quarter. That was the highest level of foreclosures since DataQuick started tracking trustee’s deeds in 1988.”
_________________________________________________
I’d like to send a Congratulations out to the state of California for hitting an all-time record. This wasn’t an easy record to surpass given the strong job market, baked in the sun optimism, and abundant population growth that defines California as the premiere destination to live. With this record behind us, if we keep our focus on budgetary cuts, higher sales and gas taxes, and criminal investigations of mortgage fraud, I have no doubt a new record will be set come july. California, you illegitimate bastard, stand proud and show us why we love you.
Sincerely,
California Association of Realtors
As I look back on my record of NODs I think it’s safe to assume that 6 months from now March will be looked back upon as, “the good ol’ days”.
Out is in, in the Inland Empire
“In San Bernardino County, 4,523 homes were foreclosed on, up almost 398 percent from the first quarter of 2007 and hitting a record for the third consecutive quarter.”
Well, well, well. If I had a dime for every person, inc. myself, who called this over the last 4 years, I would make Buffet and Gates combined look poor.
As a parallel, my BIL and SIL, who bought my home, are throwing in the towel after 26 months. House went up for sale 7 days ago. Oh well, they want to upsize to a larger home, but with a $500/month less mortgage. Here is what I don’t get. If you were on the edge currently at $X/month, what makes you comfortable at X-500/month, esp. since if they wait another year, that savings may be X-1,000/month, or even more?
However, I just keep my mouth shut. This is the same guy who went BK about 10 years ago and has a doggie boutique he runs at a flea market and he is on disability. Wife is the major bread winner.
Finally, my wife feels bad since we sold to them and it is her sister. I told her they wera adults and we cut the price for them by 12%, which was still too high for them. Not bragging just pointing out that everyone involoved
was and still is an adult. I think!
Close italics?
So you JT-ed your inlaws……..well done! Reaming a family member is like making a 3-pointer and getting fouled in the process.
Potential 4-close point play
Bet thanksgiving is fun, what with turkey jokes and all!
Rule of thumb, never and I mean never sell anything to family or friend, unless you want to be on the hook for repairs or replacements. IMHO, from experience.
The foreclosure tsunami is now sitting on the other side of the 405 in the South Bay…I again heard somebody this week vomit up the now boring ‘it’s different here’ logic - but when I asked him where the wall was, he was confused. When I clarified - ‘at what house or block or physical impediment does that wall stop at…the enlightened house one closer to the beach where buyers miracrulously become prudent and/or where there will be no spillover - people buying Gardena instead of pushing to be in a nicer (if there is one) area of Hawthorne or people buying in the most western portion of Hawthorne vs the most eastern in Manhattan Beach’.
Silence is a very telling event.
The devil is in the details. Maybe you should’ve asked him where the subprime wall is, then where the Alt-A wall is, and then finally where the prime wall is. Oh, together they make a triangle encompassing all of LA? Sounds like a problem.
“The foreclosure tsunami is now sitting on the other side of the 405 in the South Bay”
The inland parts of SB such as Gardena, carson, hawthorne, lawndale, east torrance, are inundated with foreclosures due to lots of cheaply built townhomes, mcStuccos, other multi-units put up there and waaay overpriced . The tsunami is ready to break upon the shores of the better parts of SB such as West torrance & redondo beach. The tsunami breakwall is strongest in Mahahtten beach, hermosa and PV but that wall will eventually be breached.
Just a matter of time.
Begged, sent every article, links to this blog, but still stupid stepson insisted on buying at Fusion feb 07. Finally saw the place at Christmas and it’s a pile of apartments and badly designed. The worse part is he’s got real skin in the game - put in over $100K inheritance money for down. We told him he’s now stuck there for at least 5 years just to break even. That’s what happens when 24 year olds have lots o money. He makes pretty good money working for MySpace and has no wife or kids, so I guess he’ll be OK. I really, really tried, but to no avail.
Ooooh, I’ve seen Fusion… that smarts! Still, making a mistake like that at 24 is not so bad….especially with free money.
Let’s see…bought for $300,000…owes $650,000 and wants to get out of owing $250,000 owed through a short sale. Hmmm..bought a gun for $25.00…hired myself as a hitman for $50.00 and want to get off saying it was a accidental shooting.
There’s no such thing as personal responsbility anymore…wtf? I’m really getting tired of these supposed sob stories. The dude was an idiot and deserves to get whatever comes his way as a consequence of his greed.
personal responsbility
File that relic in the same archive with “savings”, “living within one’s means”, “business ethics”, “fiduciary responsibility”, and “government for the people”.
Lowering prices is a double-edged sword. If you’re in a market where the average price was $400,000, and you start selling at $300,000, you just wiped out a lot of people,’ he said. ‘They now have negative equity. Every time I or somebody else drops the price, we’re adding negative equity and negative equity is very damaging to consumer confidence
Am I supposed to break out the world’s smallest violin on this statement? The market price is the market price. Gas goes up. Gas goes down. It is different today than it was last week (higher). Next month, maybe it might go down (although unlikely, but you know what I mean). Doesn’t mean I am bitching about today’s price if it goes down. I am happy I spend less today, but last week needed the gas and paid whatever the price was. If I need to sell my house, I sell it at whatever someone will pay. I don’t care what phantom equity (cause it is gone anyway) someone else will bitch about.
Amen to that. Cue the vioins and the harps. Bunch of babies. Man up and grow some! I am so sick of these people. Welcome to the real world. What is the matter, mommy and daddy aren’t there to cover your sorry butts?
Get real!
“First the good news: Home sales in the San Fernando Valley increased for the third consecutive month in March, according to reports released Tuesday.
This ain’t good news; it’s no news. Nothing more than a seasonal trend that we see every year.
Our local paper tried to apply the same logic: “Sales are up vs Feb!!” Of course they are ! Inventory is also up (not mentioned).
“First the good news: Home sales in the San Fernando Valley increased for the third consecutive month in March, according to reports released Tuesday.”
And there was more daylight today than yesterday and there will be more tomorrow than today. Get back to me in October if this is still happening, same with increasing sales. I’m not expecting to be interrupted in October.
For all the conspiracy theorists out there concerning the NAU (North American Union), my inside sources are telling me to watch out for a change in the acronym. Word has it that NAU would be too often confused with Northern Arizona University and thus they decided it should be…
UNA - Union de North America
una, the feminine name for one, signifies the unity that will result once it comes to fruition. They also went with the feminine gender as a favor to Canada. With the male breast tissue issue sweeping that nation currently, the powers that be wanted to show empathy to our northern neighbors. Well, good news as far as I’m concerned.
“Woodsmith said one couple she counseled recently had a $300,000 loan, even though both were line workers in a minimum-wage industry. ‘That was a loan that was destined to fail,’ she said.”
Ok- is anyone really shocked about the news from the Central Valley? Home prices doubled, tripled, and more in a matter of years in an area where the largest employers are school districts, farms, packing sheds, canneries, etc.
This area of California is about par with Appalachia, in terms of amount of people living below or barely above the poverty line…
…….and number of teeth per mouth.
But unless I’ve missed something the folks in Appalachia are more financially savvy.
And more attractive, if Ellie Mae is an indication.
Oh that is sooo true. Try taking Amtrak through Central California. You will swear you are in a third-world nation. One of the poorer ones, too.
Oh that is sooo true. Try taking Amtrak through Central California. You will swear you are in a third-world nation. One of the poorer ones, too
I thought LA was the third world nation!
Amtrak stations are alway in the dumpiest oldest scummiest dwtn city sections. Also the railroad tracts within major cities and urban areas always go thru the dumpiest crappiest third worlds sections. Any parts of any city adjacent to railroad tracts are usually either trashed out grimy old industrial zones or equally trashed out ghettos.
One big difference on my gas example and the house.
When I lived in CA, I rented an apartment because I figured housing was too high and I CHOSE not to pay an insane price. At the gas station, I need gas in car when it is low and pay whatever the price was at that time because I need to go wherever. I CONSUMED it.
“Rick Caruso, Caruso Affiliated CEO, says that built into the price tag of an Americana condo is a lifestyle and living experience that’s beyond comparison to other properties in the regional market.”
“The Bullshit is strong with this one.” - Darth Realtor
Americana condo is a lifestyle and living experience that’s beyond comparison ..
maybe the condo fee includes a happy ending massage service..
happy ending massage service
LOL - That would be a *great* business name!
ROTFLMAO!!!
good lord, for those prices it should come with free hookers, and a lifetime supply of Viagra.
Uh? Is this a literary allusion?
the happy ending massage service that is, not the hookers and viagra…
““The Bullshit is strong with this one.” - Darth Realtor”
“For the BS he spews, a JT treatment he must receive” - ex-nnv-yoda
“‘The bad news is that there will be a massive decline in home prices,’ he said, while the better news is that the flow of people who leave the state in search of more affordable housing will come to an end. ‘California will become a cheap place to live again,’ he said.”
California hasn’t been a “cheap” place to live since the late 1960’s IMHO.
“Tax-wise, some clients might be better off going through a foreclosure than a short sale, Tomlinson says.”
Isn’t this still “debt forgiveness” and taxable by the IRS?
Regarding the debt forgiveness issue, the article is pretty unclear about this. From my very brief research, it doesn’t really appear to matter much in this example. According to the IRS website, cancellation of debt is not treated as income if the debt is non-recourse. Seeing as how this guy refinanced a number of times and pulled cash out, the debt would be recourse, so even if the lender foreclosed it would be taxable.
The only way that I can see that it would possibly make a difference is if the loan was non-recourse; and this would only make a potential difference at the state level since California has not yet enacted legislation to conform to the new federal law (but presumably does conform to the IRS rule that forgiveness of non-recourse debt in a foreclosure is not taxable).
I am not an accountant, so I could be reading this wrong, but that was my impression.
Neil Diamond:
“LA’s fine, sunshine most of the time
The feeling is laid back
Palm trees grow and the rents are low
But you know I keep thinking about
Making my way back”
California hasn’t been a “cheap” place to live since the late 1960’s IMHO.
Well… if Thornberg says its going to be a cheap place to live again, I’m happy!
But its too late to stop the flow of people in 2008 and 2009. Big companies have to plan moves about 30 months ahead of time. Friends are pointing out buildings going up in quite a few ‘affordable markets’ for a number of bubble market based companies (its not just California).
However, California won’t become too cheap. By the time anyone can afford a home near the beach… the midwest would be vacant.
Got Popcorn?
Neil
“‘The bad news is that there will be a massive decline in home prices,’ he said, while the better news is that the flow of people who leave the state in search of more affordable housing will come to an end. ‘California will become a cheap place to live again,’ he said.
———————————
Really? A cheap place to live again? Like western Nebraska cheap?
Or just “California cheap” - still over $250 a square foot and around 5 times local average income?
I agree with his statement, ‘California will become a cheap place to live again,’. California only needs to drop another 60% from here, much better than the 75% we needed last year.
“California cheap” = bleach-blond, fake boobs, designer sunglasses and a $2500 hand-bag.
Now tell me about the women.
It would take a lot of Fires, Floods and Earthquakes to make California “Western Nebraska Cheap”. But I do expect to see inflation-adjusted prices in the range of $100/ft at the low end and $500/ft at the high end before too long. Right now, it’s over $1000/ft at the high end, and by that I mean solid houses in great neighborhoods, not mega-mansions.
–
‘I think one of the best things on this project was the win, win, win.’
Something to be said about fantasy expectations, especially, by a politician. That is how a project gets approval — paint it as a win, win, win proposal.
Jas
And if you’re the mayor of Austin, pushing downtown condo towers (Look down on the local landmarks!) and lower-rise condo developments on every square inch of space outside downtown, you benefit from your name. Will Wynn. (I kid you not.)
–
“They (buyers) are reading the news and they’re holding back…”
During 2004-05 they were reading the news and couldn’t wait to buy no matter the price. One is the flip side of the other.
Jas
“It will feature 69 affordable housing units serving low-income families and individuals. Another 15 will be reserved for recently homeless individuals trying to make a fresh start. Thirteen ocean-view condominiums, meanwhile, will be sold at market rates to help pay for the project.”
Who will be in the 15 high income households that will spend big bucks to live in a residential development with 69 poor households and 15 former vagrants? Also, I assume the 15% “market rate” purchasers will have to pay 75% of the HOA expenses.
When did it become the government’s business to put roofs over the heads of low-income people and “former” vagrants? There’s more than a casual relationship between “low income” and “low IQ” and/or “poor choices in life.”
It turns out that it’s in all our best interests to try to help these people. Having them out on the street is a worse idea than doing something to deal with them. Some of them may be able to climb out of it. The ones that can’t, well, our culture has its costs to the rest of us.
However, giving them nice apartments to themselves and mixing them with everyone else probably isn’t a good idea. Nobody’s heard of a barracks, these days? Just because it behooves us to help them out doesn’t mean we have to give them equal living conditions. :\
Ontario put up a tent city for the vagrants. It was seriously over-subscribed - vagrants were drawn from all over the area. Cheaper than building barracks, and the vagrants seem to like it.
These tent cities are a drain on public resources, but not nearly as wasteful as trying to build public housing as part of an ocean-view condo development.
My guess is that if they subsidized housing for the low end then the middle would be squeezed even more, thus forcing prices even higher, as there was no lower end housing to fall back on. This was designed to enslave the young, ensure the older generation does not retire, and make the filthy rich even filthier. Too bad it all blew up right BEFORE election time, damn market. They are still doing a fabulous job diverting the sheeples’ attention with the can’t win Clintons. Meanwhile rice gets rationed, gas creeps higher, wars continue, and the media becomes a one sided, singly owned entity, designed to spew stupidity.
Pass the Kool-aid, reality sucks ass.
Exactly. We’re always going to have the problems associated with poverty and homelessness, but we don’t have to build palaces to put them in. The tent city in Ontario, okay, it’s not pretty, but it isn’t a Brazil favela either.
Who will be in the 15 high income households that will spend big bucks to live in a residential development with 69 poor households and 15 former vagrants?
They’ll need to *really* like that ocean view.
Yeah, you read that description of the project and wonder what they were thinking. That sort of an ill-conceived project was lucky to be aborted. Maybe it can be converted into something sensible now that reality has set in. But you really have to wonder how it ever got construction financing in the first place with such an inpractical financial structure… even if there was government money involved.
Oh, wait - the banks were financing every proposal, no matter how stupid.
Never mind.
–
“‘Lowering prices is a double-edged sword. If you’re in a market where the average price was $400,000, and you start selling at $300,000, you just wiped out a lot of people,’ he said. ‘They now have negative equity. Every time I or somebody else drops the price, we’re adding negative equity and negative equity is very damaging to consumer confidence.’”
What a moron. Amazing that this guy is president of a business.
Jas
With that kind of business acumen, I don’t think he will be president of a business for long. I see a BK in his future.
“And according to Caruso, there’s plenty of initial interest. Rob Miller, who lives in the San Fernando Valley and works in Glendale, is not one of them. Nor does he believe there’s real interest in the Los Angeles region among deep-pocketed buyers to move to Glendale.”
Glendale is one of the nether regions of the city of angles, it doesn’t have the exclusivity of La Canada (deep-pocketed buyers) and isn’t Silverlake. (hipness factor)
It’s just one of the larger cities orbiting el lay, nothing more.
Or you could pay $1 million to live at the AMC Palm Plaza in Burbank. A multiplex just steps from your doorway!
Bwahahahahahahahahahahaha. Cracks me up.
“Reynen is the latest home builder to hit rough water in what Jonathan Dienhart, who tracks sales for Hanley Wood Market Intelligence, called a historically significant downturn.”
It’s a boom when it goes up, but when it goes down even faster it’s only a “downturn”, not a crash? I guess there’s some progress. It’s now a “historically significant downturn” instead of merely a downturn.
Yes, “historically significan downturn.” I like that.
I have a feeling that this “downturn” is going to be all over the history books years from now. I can already see the documentaries that’ll be made: elderly people sitting in the mobile homes they’ve lived in since the housing bust, talking about how they lost their saving, retirement, and credit score in the Great Housing Bust.
Hmmmm…… Mobile homes. That might be the next big thing!
Yesterday evening while I waited at work for it to be time to go pick up my eldest at Bob Hope airport I got to cipherin’ regarding where I now stand, cost wise.
I sold my house in Nov. ‘04 for 320K, netted 150K plus the paid for 40 acres which had been purchased with heloc. For my purpose I’ll ignore the 40 acres, it’s too hard to value now.
We’ve been renting for 41 months now at an average monthly rent of $1450. That’s 59.5K. The median wishing price for a 4+3 in the zip I sold in is now down 21% from when I sold, actual sales prices are lower still.
21% of my sales price is 67K minus 59.5K paid in rent, that’s 7.5K to the good for renting or in other words I’m being paid $182/month average for renting vs. owning.
It’s actually much better than that when one takes into account maintenance, taxes, interest earned on the 150K cash, etc. I love being a renter!!!
Funny thing about this is, just about anyone who cares to price their property right would really be doing themselves a huge financial favor by selling right now while there are still a few greater fools left out there.
“Funny thing about this is, just about anyone who cares to price their property right would really be doing themselves a huge financial favor by selling right now while there are still a few greater fools left out there.”
My thoughts exactly. We just sold a house at a loss. It took a few days to adjust to the loss when we got the offer –60k less than what we paid 3 years ago. (not sure how the loss averages after taxes, deductions, and comparing what we would have paid in rent) We sold it for around 250k. My thought is that it’s better to unload it at 250k, than wait until it’s worth $170k –which is in all honesty a more realistic price for the house. It could be another 20 or so years before that house is ever worth over $300k. Especially since times could get pretty bad for a while once the air is completely gone from this bubble.
Karen,
Smart move. My best friend just did the same thing. The difference is… he and his wife want to buy right away. Luckily for them, his work is keeping him too busy to house hunt. Or maybe he just isn’t willing to say the market is poised to drop fast…
Got Popcorn?
Neil
Not sure if the place was paid off (assuming it wasn’t since you say you netted less than the sales price). If not, then you need to include in your calculation the mortgage payments that you would have made during the past 41 months (with adjustments for reduction of principal and tax deduction for interest paid), resulting in an even larger gain for renting.
Good point.
Renting is not free. But I get your point.
No, renting pays!!!
–
“Los Angeles-based economist Christopher Thornberg said a ‘vicious cycle’ has developed in which falling home values fuel foreclosures, which in turn cause home values to decline further.”
This guy definitely reads HBB. Good for him. John Husing is also making lot of sense in his comments.
Jas
Thornberg has been ahead of the curve (compared to most economists). Husing was behind the curve for awhile (see his comments in around 2005 where he claimed that the IE was essentially recession-proof because the economy was so diverse), but seems to have seen the light in the last year or so.
The current comments from Husing are pure CYA. He’s still saying IF it’s a recession it will be of a short duration.
WRONG AGAIN JOHNNY!!!
Husing forgot to factor in the price of the gasoline that the Victorville millionaires will spend hauling 40lb bags of rice up the Cajon Pass in their Hummers
Since we did not get a desert thread today (AZ and NV), I’d like to throw out an observation from my local market for commentary:
A house that sold for $575 in December 2006 was a short-sale listed for $495 about a month ago. The total 1st and 2nd mortgages were about $560 - the banks were already willingly looking at a 12% loss (I’m guessing very little principal was ever paid off). Checked Realtor-com again today and didn’t see the property, thinking “Ok, I guess somebody picked it up or they’re reworking the listing”. Scrolling down, I found the house a few pages later listed at $410! Unsure if this is still a SS or now an REO.
Probably still about 15% high, but a nice 29% drop from the peak - the first drop of that magnitude I’ve seen in this range of house in the particular area it is located.
This is a 4/3 2800 sqft on a 20,000 sqft lot, backs to golf course and much larger custom homes, pool in the back, etc.
Anyway, it’s good to see real price improvements finally occuring - most of the “non-desperate” sellers are still not getting real, but listings like this will force them to.
What zip code?
Up here in 85086 I heard about a 4900 sq ft house going for $82 per sq ft. This is on a nice lot that backs up to a wash and is on a cul-de-sac. This was reported to be a Wells Fargo home. They had to be taking a hit of about $400k if it really went for that price.
until she learned it would cost her more than $700,000.”
“‘That’s a bit out of my range,’ Walsh said. ‘For that location, I would say give me a beach view and I might think differently. I think that for sure I’ll rent indefinitely.’”
At least this chick used her brain (or the circumstances forced her to). Welcome to the “I Didn’t Become a Knifecatcher” club. Congratulations. Save some dough for the real bargains whenever they come along.
The client bought the home seven years ago for about $300,000, refinanced it several times and now owes $650,000. Very little of the increased debt went into the house.”
And which DUMB$H!T bank is holding this note? Or is it 6500 smart investors (ha, ha) at a $100 each that were sold down the river by some lying scumbags eager to make a commission (most likely) and hide the loss elsewhere?
Yeehaaaaw…Montgomery County, MD is up 4%! My home county LOL
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/21/AR2008042102735.html
“The median sales price for Montgomery County houses rose 4 percent, to $495,000 from $475,000, the highest price in suburban Maryland.”
“‘I know from construction financing typically that if there’s any construction going on at the site then they’re very reluctant to extend any new financing,’ Halter says. ‘It definitely concerns me because this is a pivotal project for Downtown. As a community, as a government we really have no regard for the impact of time on economics.’”
“Halter says he and other critics of the city’s slow planning process ’saw the writing on the wall’ about the economic slowdown. ‘We knew that we had a short period of time. That was the longest economic, prosperous time that I knew of in my lifetime,’ he says.”
The supposed reason for this project was largely the result of the excesses of that “prosperous” time. Apparently it was prosperous for him. For many, it was not. Let housing prices fall enough to restore historical levels of affordability and the need for these type of projects will be greatly reduced.
…as a government we really have no regard for the impact of time on economics..
Mr. Halter.. I suppose someone should have informed you that the time element deserves the utmost respect when it comes to economics. Oh well, no biggee.. It’s only OPM.
OT–
The Santa Barbara City Council recently approved a new ordinance detailing which areas within city limts where medical-marijuana dispensaries will (and won’t) be permitted. The same week, federal DEA agents hand-delivered threatening notices to operators of all existing local dispensaries and purportedly raided and shut down one of them. Currently at the Santa Barbara Housing Bubble Blog:
FOR SALE — 2 downtown houses on one lot. Zoned C-2. Site of former pot shop. Listing price: $899,000.
Leave it to Beaver to submit a lowball offer.
Thanks for reading,
Saint Barbara
I tried marijuana once and didn’t inhale.
I have never smoked either a joint or tobacco, but once or twice in my youth I was in a room where enough weed had been smoked so I got mildly high on passive inhalation.
I must confess the feeling was remarkably pleasant.
“Richard Tomlinson, a certified public accountant in Pittsburg, says the federal law will mainly help people who bought a house at the peak of the market with a bad mortgage and never refinanced. ‘If you refinanced at all and used the refi proceeds to pay off credit cards or buy investment properties, it helps you little or not at all,’ he says.”
Well, there is some good news. Congress has made a distinction between the sheep who were herded into “buying not or being priced out forever,” and those who cashed out to live large or specutlated to get rich without working.
Let’s hope that distinction continues in any future bailout.
“Gabriela Walsh, a Valencia resident who works in Glendale, had her heart set on buying a condo at the Americana at Brand — until she learned it would cost her more than $700,000.”
Just to comment on the concept of creating artificial semi-enclosed main street type shopping experiences such as the grove and americana. I have been out to the grove in LA maybe once or twice.
It has a good location in heart of fairfax district adjacent to the old farmers market and gets the foot traffic. But it is a pretty much a retailers bazaar except u do your shopping outdoors on sidewalks & plazas instead if inside a closed A/C mall such as the nearby Beverly Center.
have been to Glendale dwtn many times thou i havn’t seen the new Americana. At least dwtn Glendale dosen’t seem to be experiencing the decay of many other old LA civic centers & dwtns, though it dosen’t quite have the attractiveness of having as many old historicial bldgs as old town Pasadena. Dwtn Glendale is one of the better cleaner dwtns in LA region, which admittedly is taken from a small sampling of livable walkable dwtns. And my experence is limited to Brand and central avenues-the two main business strips- going a mile or two south of the 134 fwy. Maybe there might be rough seedy pockets away from the immediate dwtn core, though i don’t see Glendale as bad as most other older LA mid-sized burgs.
Last i went there late 2007 the dwtn seemed to be fading out somewhat, with declining business volume and dwtn walkers, but this may be coinciding with the start of the recession in CA, which i believe will be a bad one and will hit CA harder than the nation.
The Americana is beautiful - the opening date is unfortunately extremely ill-timed, which isn’t Caruso’s fault (a lawsuit backed by the Glendale Galleria delayed start of construction) Had they finished over a year ago, there would have been plenty of greedy suckers who would have bought in at the inflated prices. I don’t know how the retail end will hold up - we’re in the beginning stages of a depression and Glendale is already saturated with stores. Just how many malls do we need?
From the floorplans the apartments look like sardine cans and the condos are poorly laid out (no room for doors to open in one model). For the same money you could rent a house.
Overall, Glendale is probably one of the safest areas in the LA basin. I’ve lived here for 15 years and have never had a problem.
Thank you for using the “D” word (Depression). Its so PC not to, and as I’ve read about the Roaring 20’s, and what lead up to the 29 crash, its a rhythm of history.
“History doesn’t repeat itself, but it does rhyme.”
- Mark Twain
pardon my ignorance, what does it mean when you hear that a sale is going to affect the “comps?”
comps = comparable
The price at which a house is listed for sale should be the same as the SOLD prices of comparable houses in the same area because that is what it is worth - based on sale prices.
‘The house next door with the same floor plan, yard, and pool sold yesterday for $400k. That is how much my house is now ‘worth.’ Unfortunately, I bought two years ago for $600K but what I paid and what I can now sell it for are two different prices. My house is only worth what someone is willing to pay, and why will they pay $600,000 when comparable houses are selling for $400,000?’
The appraised value of a house, or anything for that matter, is derived from the sales price of comparable properties. The actual, past sales prices are adjusted by the appraiser, up or down, based on time and differences in financing, location, and physical characteristics. Appraisers call the comparable properties “comps.”
I believe The Americana is a big mistake for the city. I used to live in Glendale about 4 blocks from the Galleria. I now live in Irvine because I found a high-paying job here. Believe me, the last thing Glendale needs is another type of disney-theme development, which has been perfected in the suburbs of Orange County, pretending to fit in an urban context by adding housing in its program, but delivering nothing except the FAKE street experience. Every city in the LA Metro wants to have their own version of 3rd Street Promenade or Colorado St. in Old Town Pasadena. These places required a lot of great planning, effort and patience by the city for them to evolve for what they are today. What they have in common is incremental development resulting in real urban experience, and not the big developer’s marketing ideas that promises nothing but a brand of fake lifestyle, more traffic, and an UGLY project that is totally out of context in the city of Glendale.