It Was Not A Very Pretty Meeting
Some housing bubble news from Wall Street and Washington. Bloomberg, “D.R. Horton Inc. reported a record loss as the deepening housing slump forced it to write down $834.1 million of land and inventory. The fiscal second-quarter net loss at the largest U.S. homebuilder was $1.31 billion, almost seven times higher than analysts’ estimates. Revenue plunged 38 percent to $1.62 billion.”
“‘Clearly in this past quarter we met the market and it was not a very pretty meeting and prices did decline in the quarter as we reported,’ said D.R. Horton CEO Donald Tomnitz. The company is ‘most concerned about the level of foreclosures entering the market and I think to the extent that those are significantly greater than what they are currently, then that’s going to negatively impact our pricing moving forward.’”
“The backlog, or homes under contract and not yet sold, fell 47 percent to 8,947. The value of the backlog plunged 57 percent to $2.1 billion at the end of March. The average selling price for a completed home sale in the quarter fell 8 percent to $237,800 in the quarter, Tomnitz said on the call. For homes ordered, the average price fell 15 percent to $220,800, Tomnitz said.”
From MarketWatch. “D.R. Horton’s net sales orders fell to 7,528 homes from 9,983 homes a year ago. The cancellation rate, measured by cancelled sales orders divided by gross sales orders, was 33% in the fiscal second quarter. It owns or controls 181,000 lots, or a 5.2-year supply.”
The Associated Press. “St. Joe Co., a Florida real estate developer, said Tuesday total residential sales plunged to $17.6 million from $37 million a year earlier. Rural land sales leaped to $91.1 million from $46.7 million in the first quarter of 2007.”
“‘With the U.S. and Florida economies battling rising home foreclosures, a tightening of credit and a significant inventory of unsold homes, predicting when residential real estate markets will return to health remains difficult,’ said CEO Peter S. Rummell.”
“‘Consumer confidence is declining and many consumers seem to be deferring residential real estate purchases until there is more economic clarity,’ said Rummell.”
“Bovis Homes Group Plc, the U.K.’s most profitable homebuilder, said first-half profit will be ’significantly’ lower than forecast after a 30 percent drop in orders.”
“Reservations since March 10 fell to 1,382 from 1,979 a year earlier, the Longfield, England-based company said today. Demand for private homes plunged 70 percent and prices may be cut in some markets, CEO Malcolm Harris said in an interview.”
“Bovis’ properties range from a one-bedroom apartment in Cambridgeshire, selling for 204,950 pounds, to a five-bedroom detached home in Reading, priced at almost half a million pounds. The company has reduced selling prices by 10 percent in Cardiff Bay, Wales, because of an oversupply of apartments, Harris said.”
“‘The last eight weeks have been particularly difficult,’ the CEO said. ‘The availability and pricing of mortgages is creating an enormous problem. First-time buyers are virtually priced out of the market. We’ve had people who have come along and reserved on a mortgage offer and then gone back to the lender and found that withdrawn.’”
The BBC News. “About 150 estate agents’ branches are now closing every week in the UK, according to research. The number of properties changing hands has fallen sharply in the past 12 months. And Bank of England figures show that the number of new mortgages approved in March was the lowest since records began in 1999.”
“‘There is money out there,’ said Jeremy Leaf, from the Royal Institute of Chartered Surveyors. ‘But even more creditworthy borrowers are being told that they need a more hefty deposit or they wont be able to get the mortgage they want.’”
The New Zealand Herald. “The Auckland property market has virtually ground to a halt and prices are falling, fresh figures from the city’s biggest real estate agency group suggest.”
“Barfoot & Thompson has reported sales fell to 453 in April, down 50 per cent from April a year ago and down 28 per cent from 632 sales in March. The number of new listings in the month was almost quadruple the number of houses that actually sold in April.”
“The average sale price reported by the firm in April fell to NZ$520,380 and is now down 7 per cent from its peak of NZ$559,903 in December last year. The number of houses listed as available for sale rose to 7,843 at the end of April from 7,379 at the end of March and was 76 per cent higher than a year ago.”
The Northern Life from Canada. “This city’s housing market remains hot. New Sudbury house price gains (for a typical 1,130 square foot bungalow) from last year to the present, lead the province, according to Century 21.”
“That bungalow on a 60 by 132 foot lot, with three bedrooms and two baths, sold for $175,000 in 2007 but has climbed to $237,000 in 2008 – an increase of 35 per cent. Remarkably, in second place, was Val Caron.”
“Rick Lymer, Ontario regional economist with the federal government, does not think the good times are a bubble. ‘Certainly not for housing when you look at the low interest rates. It is a good time to buy a house. I see no sign of this housing surge slowing down,’ he said.”
“For years few houses were being built, and now there is not enough supply in place to meet the increase in demand, he said.”
The Star from Canada. “The spring rebound anticipated by realtors in the Toronto area market hasn’t happened – at least not yet. Existing-home sales in April were down by 7 per cent from the record highs of last year, with 8,762 homes sold, according to the Toronto Real Estate Board.”
“This is the fourth-consecutive month of declining home sales. April was considered a bellwether since it was the first month of good weather after one of the coldest and snowiest winters in recent years. Most analysts had expected pent- up demand to emerge in the spring market as potential homebuyers were hampered by slush and snow in the first quarter of the year.”
“Inventory, in the form of new listings, was also up significantly in April. It advanced by 18 per cent to 18,691 as sellers hoped the better weather would bring buyers out. ‘With affordability the lowest in 17 years, the housing market should continue to cool, despite recent declines in mortgage rates,’ said Sal Guatieri, senior economist at BMO Nesbitt Burns.”
The Edmonton Journal from Canada. “If you were selling a ‘typical’ home this time last year, chances are it lasted 22 days on the market before someone bought it. You got $413,488 for it. That was then. This is now.”
“Selling a typical home these days? Chances are you’ll wait, and wait, for 52 days before selling. And the payoff? About $28,000 less for your single-family detached house than if you’d sold it last year — an average of $386,033, according to monthly figures for April released Monday by the Realtors Association of Edmonton.”
“Condos, duplexes and rowhouses also dipped in average price, and thickets of ‘For Sale’ signs seemingly stand outside every multi-family development.”
“Richard Goatcher, Edmonton senior market analyst for Canada Mortgage and Housing Corporation: ‘As we went into 2006, we went into sort of an overheating, accelerating market because demand outstripped supply, so for most of 2006 and four months of 2007 we had record-level price increases and a lot of speculative activity and high levels of new construction.’”
“There are 10,606 residential properties currently on MLS, up 12 per cent from last month. Why so many? Pat Adams, a condominium builder and president of the local branch of the Canadian Home Builders’ Association: ‘In 2005, if you could put up a house you could sell it.’”
“‘What happened to us in the industry is that it started taking longer to build and it cost more to build. Now, we’ve got an affordability problem and you’ve got an oversupply problem because one of the answers to a rapid increase in costs is to build as fast as you can. That means you’re going to end up with unsold houses if the market turns, and that’s what happened,’ he said.”
“Should I buy now or wait? Marc Perras, president of the Realtors Association of Edmonton.: ‘I think it’s a great time to buy now.’”
“Should I sell now or hold? Perras: ‘It’s tough to answer carte blanche. I’ve been telling people if you’re testing the market, you may want to wait for a different year to do that in.’”
“Fannie Mae, the largest U.S. mortgage- finance company, reported a wider loss than analysts estimated. Fannie Mae needs new capital to weather credit and derivative losses that rose fivefold to $8.9 billion.”
“Fannie Mae, under new standards, listed $56.1 billion in so- called Level 3 assets, a category which indicates the holdings are so illiquid that they can only be priced using the firm’s own valuation models. This is the first quarter Fannie Mae has been required to disclose such assets.”
“A key House lawmaker on Monday complained that the mortgage industry has done little over the past month to make higher-value loans available in costly housing markets after Congress took steps to try to infuse more cash into the so-called jumbo market.”
“‘I am disappointed,’ Rep. Barney Frank said in response to an audience question after a speech to a Mortgage Bankers Association convention. ‘We fought very hard to raise the loan limits for Fannie and Freddie, and there have been a lot of problems in implementation.’”
“Jay Brinkman, chief economist for the Mortgage Bankers Association, said Wall Street investors have been cautious to invest in jumbo mortgages under the new higher cap until the market determines how to properly price such securities and assess their risks.”
“‘You don’t want to guess on the low side,’ Brinkman said. ‘If you make a mistake in this environment … you can take a serious price hit.’”
From Money Magazine. “Can a couple coats of paint, some spackle and $15 billion keep foreclosed homes from bringing down the home market? A housing-rescue bill moving through Congress would allocate $7.5 billion in grants and $7.5 billion in zero-interest loans to states to buy foreclosed homes, rehab them, and resell them.”
“In 2002, the city of Baltimore started to buy abandoned properties in an effort dubbed ‘Project 5,000′ for the number of homes it wanted to purchase. Now, the city owns more than 10,000 vacant properties but hasn’t found an efficient way to unload them.”
“Relative to the foreclosure crisis, $15 billion is a drop in the bucket. According to foreclosure tracker RealtyTrac, about 650,000 foreclosure filings on properties were submitted in the first quarter. If the $15 billion were used just to buy homes with an average price of $100,000, states could purchase 150,000 homes.”
“Some worry that cities would be getting in over their heads. ‘I don’t buy that it’s going to work,’ said Vincent Valvo, group publisher of The Warren Group. ‘If cities were good at buying, selling, and developing things, we wouldn’t need private developers.’”
“Countrywide Financial Corp. has suspended the home equity credit lines of almost all its Las Vegas customers. Since January, Countrywide, Bank of America Corp., Washington Mutual Inc. and IndyMac Bancorp Inc. have frozen about 600,000 equity credit lines nationwide, said Michael Kratzer, president of a Bankrate Inc.-owned Web site that’s fielding consumer complaints.”
“Homeowners’ pain is acute in Las Vegas, where property values soared 50 percent or more during 2004 and 2005 and since have plummeted. The Las Vegas housing-market crash represents a turnaround since 2003, when the local economy and real estate were booming.”
“‘If you had anything on the ball, you could make it happen in Vegas,’ said real estate agent Donna Marie Gold, who built a $4.5 million fortune buying and selling properties over six years.”
“After failing to complete a single sale last year, Gold said she fell $22,000 short each month on payments needed to maintain 14 properties. Now two to four months behind on some mortgage payments, she’s lost access to a $250,000 Wells Fargo & Co. equity credit line.”
“‘The whole thing was upside down in a New York minute,’ Gold said. ‘There needs to be some forgiveness in this climate with regards to credit and rebuilding one’s credit.’”
“John Simon, borrowed $35,000 on low-interest credit cards in 2007 to pay down his $63,000 credit line and save on the 11.75 percent interest he says Countrywide charged. He expected to be able to access the credit line later. When Countrywide froze the line, he wasn’t able to get money needed to pay his bills.”
“‘They took away the last amount of cash I had to make all the payments on my father’s retirement home,’ Simon said. ‘From a business standpoint, this was the stupidest thing I ever did. But it was so easy.’”
From Newsweek. “Whenever a boom goes bust, there’s always a round of finger pointing and blame assigning. And at least a few observers include an industry economist in this lineup: David Lereah, the former chief forecaster for the National Association of Realtors, whose irrational exuberance for real estate has led to some measure of ridicule.”
“It’s been more than a year since Lereah left NAR, so I called this week to check in. His answer: not yet. ‘We’re not at the bottom,’ he says. ‘[People] want it to be near the bottom, but we’re not there yet. The leading indicators are still very bad. Pending home sales are still in bad shape. Mortgage applications are low … There’s still supply out there in abundance … This thing is going to get worse before it gets better.’”
“Rick Lymer, Ontario regional economist with the federal government, does not think the good times are a bubble. ‘Certainly not for housing when you look at the low interest rates. It is a good time to buy a house. I see no sign of this housing surge slowing down,’ he said.”
He sees no signs of the surge slowing down because he has his head up his a$$. I don’t understand why this govt employee doesn’t want to throw out a warning. It should be obvious that prices shooting up this much isn’t a good thing, and there’s plenty of evidence available.
“Rick Lymer, Ontario regional economist with the federal government,”
And to think my tax dollars go to pay this retards salary. Price going up by 35% YoY in Northern Canada and he says “no signs of a bubble”. For the love of …
Must be due to the Grey Cup bounce.
LOL!!
He’s certainly a very well educated economist.
“For years few houses were being built, and now there is not enough supply in place to meet the increase in demand, he said.”
Of course, rapid price appreciation won’t lead to more building (supply up) or drive away buyers (demand down). Since we don’t have subprime here, there won’t be any meltdown like the US. I think I’ll buy a vacation home in Sudbury as an investment.
During the Apollo manned lunar exploration program, NASA astronauts trained in Sudbury to become familiar with shatter cones, a rare rock formation connected with meteorite impacts. However, the popular misconception that they were visiting Sudbury because it purportedly resembled the lifeless surface of the moon dogged the city for years.
http://en.wikipedia.org/wiki/Greater_Sudbury
I’m trying to think of a place in the US that is comparable to Sudbury. I think the best I can do is Butte Montana, if you took it out of the mountains and moved it to a flat place in the middle of nowhere.
If by soon you mean 5-10 years then sure! There is too much greed over the Olympics supposedly bringing reams of foreign investors for it to straighten out any sooner IMO. I hope I am wrong, I have two children and would love to own my own home, but not at the expense of living off ramen. Rentals are not much cheaper than buying either. $1800 for a three bedroom. Vacancy rates are around 0.5 too. So the popular thing to do is buy a huge old house, gut it and turn it into 5 or 6 suites renting @ $900-1500
I grew up in Butte. It was like living in a toilette bowl with the world’s greatest view. The mountains were gorgeous, the sky was blue, and the town and surrounding evirons were strewn with debris and mining waste and poisoned with heavy metals. We even had a ‘bowl’ in the Berkeley Pit! Ah, memories….
Sudbury is very substantially a mining town. My brother, who works as a millwright in one of the Sudbury mines, would typically earn 75k a year (including overtime and nickel bonus). This financial year, he earned 125k (including overtime and nickel bonus). That’s a 67% increase annual salary. Consequently, a 35% increase in Sudbury house prices is not so outlandish and not necessarily indicative of a bubble. Real estate is in fact partly local and partly national (and global).
Of course, if the commodities boom comes off, there could be some pain in Sudbury; but if it doesn’t, all you doom and gloomers with your money sitting in cash earning zero real interest may prove to be much poorer because of it.
I suppose everyone there works in the mines? It’s like the people who claim that everyone in Vegas works at the Bellagio or Wynn and makes $100K dealing cards or parking cars.
Just because people are stupid enough to put their money in overpriced housing doesn’t mean it’s stuffed under the mattress.
Here is some news from the trenches of BC. Victoria’s housing market is cooling, sales are down 25% YOY, and a large number of people buying houses are American and British FB investards who believe the hype that real estate in Canada is a great buy because “things are different here”. We don’t have ARM’s the economy is strong the Olympics are coming etc. Seriously , this is going to take at least 5-10 years to sort itself out. How utterly ridiculous.
Hey LiB,
Is the economy in BC really doing that well? I haven’t heard much recently. There’s all sort of talk about Alberta, Saskatchewan and Newfoundland doing well with their oil, and Ontario and Quebec doing poorly with manufacturing, but not much on BC.
Also, do you remember my post from a few weeks ago about a coworker moving to BC (claimed houses cost around 20% more, was told it’s a great time to buy)? She did buy. Just more fuel for your fire out there.
Big news story the other day was about declining real incomes in BC - lower than in 1980. BC is an RE bubble economy with a negative savings rate, exodus of middle class due to high cost of living (sound familiar) and widespread shutdowns of its major industry (forest products). Unlike Alberta and Saskatchewan, which actually produce stuff the world needs (oil, gas, grain, potash).
This house of cards is coming down soon.
“‘If you had anything on the ball, you could make it happen in Vegas,’ said real estate agent Donna Marie Gold, who built a $4.5 million fortune buying and selling properties over six years
the rest of this strange story….
“After failing to complete a single sale last year, Gold said she fell $22,000 short each month on payments needed to maintain 14 properties
If you CAN’T find a A SUCKER in vegas honey, you COULDN’T find a SUCKER …anywhere
So I guess that $4.5 million is gone?
The spring rebound anticipated by realtors in the Toronto area market hasn’t happened – at least not yet.
This is the same talk we have had here in Florida for 3 years now……………..we’ve hit bottom and the Spring selling season will start the new run-up in prices. Halle-lu-yia!
It’s all over the “financial press”. We’ve hit bottom and you better hurry up and get in before the prices get out of control again.. Don’t miss your chance!!
It’s always the Realtors ™.
Now, it’s OPEN HOUSE MONTH. Oh!, that was last month. Didn’t work out too good.
You’ll know the bottom is getting closer when there’s a headline that reads, “Is This the Year We Finally Have a Spring Selling Season?” Maybe in another year or two (for the headline, not the bottom).
We don’t have ARMs but we have 40 year amortization mortgages! Canadian banks say why bleed mortgage suckers fast when you can bleed them for longer!
Buffett on Peak Energy
Buffett said that the world’s production of oil, about 87 million barrels a day, is close to capacity. While the world won’t run out of oil this century, as one questioner suggested, Buffett said gradually depleted oil fields could reduce the amount produced.
Munger said he thinks oil production 25 years from now will be less than today.
“That’s not an insignificant prediction, believe me,” Buffett said, since demand for oil is growing steadily as the population grows and standards of living rise. “If oil production is down 25 years from now, it’s going to be a different world.”
“I think we can confidently predict there will be some pain in the process,” Munger said. After using oil, coal, natural gas and uranium fuel supplies, “we will have no other alternative to the sun.”
Got oil, coal, natural gas and uranium?
Heck, lets tap the sun!!!
DR Horton needs to build some houses on the sun.
I’ve often wondered what actually replaces the oil that we drain out of the earth. Probably some major gas that will just blow us all up one day.
“…wondered what actually replaces the oil…”
poo?
…got solar, wind, hydrogen and the new “water powered” car?
The North Dakota “Bakken” reserves should keep us oil independant long enough for alternative technologies to be pefected.
Of course, we would need a national “JFK, man on the moon” type commitment.
We’re too busy worrying about Obama’s pastor, who won American Idol and Congress in preoccupied with the huge national defense issue of steroids in baseball.
Actually the real problem is hemorrhoids in congress.
Fannie, your assets are showing…
“Fannie Mae, the largest U.S. mortgage- finance company, reported a wider loss than analysts estimated. Fannie Mae needs new capital to weather credit and derivative losses that rose fivefold to $8.9 billion.”
“Fannie Mae, under new standards, listed $56.1 billion in so- called Level 3 assets, a category which indicates the holdings are so illiquid that they can only be priced using the firm’s own valuation models. This is the first quarter Fannie Mae has been required to disclose such assets.”
“D.R. Horton’s net sales orders fell to 7,528 homes from 9,983 homes a year ago. The cancellation rate, measured by cancelled sales orders divided by gross sales orders, was 33% in the fiscal second quarter. It owns or controls 181,000 lots, or a 5.2-year supply.”
I’d say that is about an 18 year supply of land.
It must be sales in the quarter, giving the 5.2 year supply remaining at that rate. Impressive how they cleared their backlog by 47%, if thats the bulk of their unsold inventory besides all those lots. The price concerns going forward may be more about cranking out new product in the heavy foreclosure environment.
My point is the lot supply may be 5.2 years at current sales rates, but, those current sales rates will continue to crater for awhile. Thus, 181,000 lots is way too much, and they will continue to impose serious hardship upon DR Horton.
Note the last paragraph in Ben’s post. Looks like our favorite whipping boy, David Lereah, is finally telling the truth.
The Ministry of Truth has chewed him up and spit him out a long time ago, so I’m sure he is trying to pull a Greenspan in order to trying to rewrite history to protect his ‘legacy’.
And as Lereah speaks, from stage left comes the sound of Lawrence Yun whispering “bitch”.
“‘I am disappointed,’ Rep. Barney Frank said in response to an audience question after a speech to a Mortgage Bankers Association convention. ‘We fought very hard to raise the loan limits for Fannie and Freddie, and there have been a lot of problems in implementation.’”
Oooh…
“I hate you, you hate me
we’re a happy renter family
with a great big bird and flipoff from me
won’t you say you hate the taxpayers too?”
I need to e-mail Barney and tell him he’s getting real close to being the recepient of a prickly suppository. Keep it up Barney…..
He might like that. Have you noticed his lisp is getting more and more pronounced (or un-pronounced, as the case may be)?
“At his new firm he’s also looking to cash in on the weak market. He’s currently talking with several Wall Street folks about setting up an investment fund that would buy pools of distressed real estate, which it would convert into rentals.”
I would say it is impossible to believe that anyone would ever fund this man, but my guess he will find someone. He is a con artist, no different than someone setting up a three card monte game in central park.
Are you kidding? If wisely bought, vulture capital is the next investment boom… but the train doesn’t pull out of the station until 2012 and you may be to be on board by the end of 2009. I’m not saying this guy is the pied piper, but he’s singing the right tune.
I just hope we get some teeth in regulatory enforcement before there’s any “traction” in the recovery. A lot of us are completely burned out by the bubble/bust and I’d hate to see MB’s that put these people in peril to begin with profit from those very same people.
You and I can’t even imagine how many realtors are mulling about on the sidelines just itchin’ to “get back in the game” and make money on short-sales and foreclosures. In fact I think it’s a big part of the reason the REIC has been dug in so firmly resisting anything that looks like a threat to the 6%. Even here in OR, normally a consumer-friendly state we’ve played hell getting a leash on the MB’s. Hopefully the credit crunch will last long enough to get ’some’ regs in place before “Housing Boom (The Recovery)” starts anew.
I would say that would depend on what kind of properties you were buying (though I don’t think now would be the best time to dive in). If he is talking about single family homes, which a significant portion of distressed real estate is, turning many of those homes into profitable rentals seems unlikely.
Is this fund going to manage the rentals? Or will that be someone else’s problem?
RE: Is this fund going to manage the rentals? Or will that be someone else’s problem?
LMAO…Rentals!
Sure, let’s lease a property to all those mortgage deadbeats who stripped their houses clean of anything which could be sold to a metals scrapyard, stolen goods fence, or salvage yard.
Just the low-life trash you want as tenants.
Lereah says he had no idea the extent of the mortgage fraud and chicanery going on and blames that for clouding his otherwise crystal vision. Yet he goes on to endorse Frank’s bill to lower lending standards to more home buyers?
What a clown, this guy should be the chief of all clowns everywhere…oh wait he already screwed that gig up.
‘They took away the last amount of cash I had…’
What “cash”? They froze his HELOC - but he speaks like he lost his life savings. Debt is not “cash”!
Indeed, funny to think of a credit line anything resembling cash. Apparently its not even cash Countrywide had, since they’re in hock up to their eyeballs. Toxic system, like feeding the deer all summer then when winter comes around, sorry you’re on your own.
“‘If you had anything on the ball, you could make it happen in Vegas,’ said real estate agent Donna Marie Gold, who built a $4.5 million fortune buying and selling properties over six years.”
“After failing to complete a single sale last year, Gold said she fell $22,000 short each month on payments needed to maintain 14 properties. Now two to four months behind on some mortgage payments, she’s lost access to a $250,000 Wells Fargo & Co. equity credit line.”
If she is short $22K on 14 houses (apparently not rented or enough to cover payments), she DID NOT BUILD A FORTUNE.
Get it?
All these idiots got plenty of cash during the bubble. And what did they do. Buy, buy, buy to help it get higher. None placed a little bit of money in safer investments.
Must be a downer to be so ‘rich’ for a little bit, and then but a few years later realize that you are not rich in money, but rich in debt.
Indeed, she was buying properties that didn’t cash flow and paying part of the mortage out of her own pocket with the belief that housing would rise forever and make her rich. Some business plan.
“‘The whole thing was upside down in a New York minute,’ Gold said. ‘There needs to be some forgiveness in this climate with regards to credit and rebuilding one’s credit.’”
I really, really, really hope she wasn’t alluding to herself with this comment. If so, I’m hopping in the car right now, heading south down 95, and grabbing a couple of JT’s along the way. Here I come Donna!!No forgiveness for you, you speculating bag!
What is JTs?
Joshua Tree.
http://en.wikipedia.org/wiki/Joshua_tree
…she DID NOT BUILD A FORTUNE.
Either that or she’s not willing to take further hits to her bankroll. She might’ve just seen the writing on the wall and stopped making payments.
SMF,
Downer indeed. And of course she bought it all in the same town so good on ya’ Donna Marie! This really is more in line with what I was trying to point out in the last thread. Here is a person ( realtor no less ) that is very actively pursuing her real estate riches pipe dream. Naked greed, pure stupidity. No question.
Of late though I’ve become more pre-occupied by the people that woke up one morning and realized they got talked into buying more properties than they ever intended. We needn’t concern ourselves with how it all turns out for Ms. Gold.
And has anyone seen the news about LV hotels?
Profits are down.
Just because you build it, it doesn’t mean they will come.
Disney beats Wall Street, movies, parks strong
http://biz.yahoo.com/rb/080506/disney_results.html
They’re all going to Disneyland!
“said former real estate agent Donna Marie Gold, who lost a $4.5 million fortune buying and selling properties over six years.”” — there, fixed it. She made no sales last year, so she’s not a real estate agent by that standard. She’s not able to make the payments on all her debits, how can she have any fortune left?
Vegas…a fitting palce to play her slow-motion double-down roulette game. It took years to finish, but one bad number and your fortune was…poof!…gone. Sucks not knowing when to cash out. But then again cashing out ain’t where the fun’s at, is it Donna?
Her complaint doesn’t compute.
If you have $4.5 mil and you’re losing $250K/year, can’t you ride out the downturn? Or does she “have” $4.5 mil in bank-owned homes?
Parenthetically, my mom’s been a realtor since the 1960s, and we’ve always had investment property. I don’t mean “buy-and-flip” like this woman seems to think, but “buy-and-hold-through-the-good-and-the-bad”.
I can’t wait until the short-term folks like her are gone from the market so that it may once again be viable to purchase investment property.
‘There needs to be some forgiveness in this climate with regards to credit and rebuilding one’s credit.’
Uh. How about, Hell No?
Yeah - I’ll save my forgiveness for me for not jumping in when it was hot. I’ve learned so many ways I could have easily amassed tax free money. I”d be beating head against the wall full time if I had done so and then blown it all. But it was probably a once in a lifetime opportunity to have anything to do with real estate.
This lady actually wants a mulligan!
haha, too much, way too much.
Privatize the profit, socialize the risk? Sorry. Failure’s what made our nation great.
That comment really blew me away. As I said in my post above, I hope she was alluding to somone else and not her speculating, sorry a$$. What? She lives in Vegas and still doesn’t get that when foolishly blow your whole wad and lose that you walk away broke? You do what most bigtime losers in Vegas do - slink off with your tail between your legs. I’ll tell you what, Donna, why don’t you go lose a bundle at the craps table and then go ask the floor-boss for “forgiveness”. Good luck with that, b*tch!
“‘If you had anything on the ball, you could make it happen in Vegas,’ said real estate agent Donna Marie Gold, who built a $4.5 million fortune buying and selling properties over six years.”
“After failing to complete a single sale last year, Gold said she fell $22,000 short each month on payments needed to maintain 14 properties. Now two to four months behind on some mortgage payments, she’s lost access to a $250,000 Wells Fargo & Co. equity credit line.”
“‘The whole thing was upside down in a New York minute,’ Gold said. ‘There needs to be some forgiveness in this climate with regards to credit and rebuilding one’s credit.’
Yes, by all means! Forgive this poor woman who is suffering the indignity of poor credit! Never mind that she borrowed millions of dollars that she can’t pay back. That’s irrelevant. The key point is to keep forgiveness in our hearts for the likes of Ms. Gold, who “built” a 4.5 million empire. We need people like her if we are to survive these difficult times.
Seriously, there is so much whacked out stuff in that story that I don’t even know where to begin. Another FB who is a microcosm of the bubble as a whole.
But seriously, it was only 14 homes. It wasn’t like she had 20 houses or anything. Hee-hee.
‘There needs to be some forgiveness in this climate with regards to credit and rebuilding one’s credit.’
I don’t think so sugar. So, you got 4.5 million…pay your bills. Oh, that 4.5 million was what your 14 houses were worth,and you were leveraged up the wazoo?? Too bad, thanks for playing our game,now go find a job cleaning houses.
Yeah, I’d like to know what that $4.5M represents. Is that the mortgage debt she held? Surely it isn’t how much equity she had.
I can never understand how these articles get away with spinning debt owed into assets owned.
And I love the “No Cash in Office” decal on the Countrywide door!! LOL! Ya think!?!
“Yeah, I’d like to know what that $4.5M represents. Is that the mortgage debt she held? Surely it isn’t how much equity she had.”
Exactly right. All she built was a mountain of debt and probably never had more than a sliver of equity. She managed to leverage herself into more than $4M in debt. With skills like that, is she trying to run for Congress?
So with 14 foreclosures on her record in the future; I wonder if her wait time to be able to get any future financing would be longer than 7 years?
I can imagine that she would see deals of the century in the future and won’t be able to buy. That would be poetic justice.
Too bad, thanks for playing our game,now go find a job cleaning houses.
Go to the pole!
(I got that from Jerry Springer show)
Donna:
it’s not what you make.
it’s what you keep.
no charge.
“‘I am disappointed,’ Rep. Barney (Fife) Frank said in response to an audience question after a speech to a Mortgage Bankers Association convention. ‘We fought very hard to raise the loan limits for Fannie and Freddie, and there have been a lot of problems in implementation.’”
Problems in implementation. Hmmm. Lets see. Problems like, the people have to prove they have the means to pay back the loan? And they can’t, so they don’t get the loan? That kind of problem? Shocking….
“‘I am disappointed,’ Rep. Barney Frank said in response to an audience question after a speech to a Mortgage Bankers Association convention.
Yea Barn, I am very disappointed myself. With blow hard (no offense intended, well just a little) buffoons such as yourself, sticking your nose in places it does not belong!
Therefore, he is deserving of some desert vegetation stuck where “it does not belong”.
Be careful. He might not even feel it.
And the market rallies!
As if the stock market was logical.
I don’t care what anyone says: Wall Street needs to crash. They need to crash and start over. No more Bernanke Bailouts. A lot of people need to go to jail, and a lot of shareholders and CEOs alike need to start eating humble pie and start realizing their schemes have no importance in driving the REAL economy.
My sentiments exactly!
the following link was provided by ex-nnvmtgbrkr in bits buckets.
http://www.federalreserve.gov/newsevents/speech/Bernanke20080505a.htm
the multiple graphs at the end of the speech are quite disturbing.
they include:
Non-Owner-Occupied Home Purchases by County (2005 through 2006)
Percentage of Home Loans with Piggybacks by County (2005 through 2006)
thanks for the link!!!!!!
How ’bout the percentage of helocs based on phony appraisals.
That’s where the money is, er was.
Simon says Panic
“John Simon, borrowed $35,000 on low-interest credit cards in 2007 to pay down his $63,000 credit line and save on the 11.75 percent interest he says Countrywide charged. He expected to be able to access the credit line later. When Countrywide froze the line, he wasn’t able to get money needed to pay his bills.”
Simple Simon met a Tan Man
going to the Bank.
Says Simple Simon to the Tan Man
“Let me borrow there.”
Says the Tan Man to Simple Simon
“Show me your first penny.”
Says Simple Simon to the Tan Man,
“Indeed I have not any.”
BayQT~
I think the idea of having some public or private organizations come in and rehabilitate and re-sell foreclosed homes might make some sense. There’s already too many foreclosures out there, and buying foreclosed homes isn’t for everyone. With non-foreclosed sellers not willing at all to budge, someone needs to step in at some point and start turning these foreclosed messes back to warrantied, functional units for the average home buyer.
My question is, what type of margin is needed without government assistance to make this worth the investment for the turnaround companies? Assuming (for sake of argument) that these companies could expect to resell 1-2 years in the future at 30% off of current comps, at what discount to they need to buy the REOs from the lenders? 50%? 60%?
This tells me that the banks are still in la-la land if they’re refusing to let their current holdings loose, as-is, for 20-25% discounting. This will really get intersting.
No popcorn, tortilla chips and salsa for me, thank you.
We all saw this coming. These piles of junk “luxury” condos and townhouses will end up housing welfare families, dragging down many the neighborhoods they were built in. The housing boom simply provided tons of new slums to replace the old ones that were on their last legs. No wonder governments looked the other way; they were planning for the future, and knew they’d be buying these properties for pennies on the dollar.
The entire Channelside district of Tampa will, I predict, become Tampa’s newest “projects,” complete with toxic soil and air, and an architectural flair not demonstrated since the collapse of the Soviet Union. The two towers currently falling into ruin featured on this blog last week are nothing compared to the massive multi-block structures down the street that concievably could house tens of thousands of drug dealers/users within the next few years.
Way to go Tampa!
Even if there is some type of gov. agency willing to take on selling these homes, wouldn’t those prices set the comps for the area?
So then why bother buying one and only being able to sell if 20% of the price is kicked back to the government. You may as well wait and buy a ‘regular’ one. No?
Looks good on paper…….
Kansas City, Mo. had a big scandal on this issue a year or so ago.
City buys abandoned propertied in Gangland Central, rehabs the house, and then sells……..but…..
City didn’t monitor the contractors, contractors got rich off the city by overbilling for crappy, substandard work, city spends 300 grand rehabbing a property that might sell for $100,000. Contractors grab the cash, then disappear.
Yeah, that’s the ticket. Time to start a remodeling company, if this is the plan that is implemented.
Oh, I agree, the potential for abuse is almost guaranteed. I’m not sure how one would structure the operations to avoid that. I suppose the best way to avoid the abuse is to keep the government out of it, either running the show or fronting the incentives, so that individual companies have to make it work on their own.
I still think ultimately there will be some opportunities for this on a community-by-community basis, if the lenders are willing to cooperate, and at some point, I think they’ll have to. Hence my question, I wonder what amount of discounting would be needed when purchasing the REO’s in order to make it happen.
The Edmonton Journal from Canada. “If you were selling a ‘typical’ home this time last year, chances are it lasted 22 days on the market before someone bought it. You got $413,488 for it. That was then. This is now.”
400 grand for a vanilla house on the Canadian prarie, where they have 2 seasons: July and winter.
And I thought that Americans were stupid. At least the IE is a 60-120 minute drive from the beach.
Italics off!
Doh, that didn’t do it. Let’s try again.
don’t use one closing bracket when many will do the trick.
italics off?
Just have to close the ital tag …
I hate it when this happens!
IT IS NOT A GOOD TIME TO BUY.
HOUSES ARE STILL NOT AFFORDABLE. DO NOT BE A FOOL HOMEDEBTOR AND BUY AS PRICES CONTINUE TO FALL.
“‘There is money out there,’ said Jeremy Leaf, from the Royal Institute of Chartered Surveyors. ‘But even more creditworthy borrowers are being told that they need a more hefty deposit or they wont be able to get the mortgage they want.’”
I think the banks are finally getting the idea on not being the bag holder. Gee… downpayment = unlikely tendency to walk away.
I stick by my old prediction that 25% down will be required during the darkets days, excluding FHA. However… FHA increasing their limit to jumbo has scared off quite a few… I think that will backfire in the long run.
Got Popcorn?
Neil
Demand the removal of bernanke and any congresswhores that pander with responsbile tax payers money.
“‘You don’t want to guess on the low side,’ Brinkman said. ‘If you make a mistake in this environment … you can take a serious price hit.’”
Words to read carefully before any investment.
“This is the fourth-consecutive month of declining home sales. April was considered a bellwether since it was the first month of good weather after one of the coldest and snowiest winters in recent years. Most analysts had expected pent- up demand to emerge in the spring market as potential homebuyers were hampered by slush and snow in the first quarter of the year.”
Ah-Ah-ahhh-Ah!
We come from the land of the ice and snow,
From the midnight sun where the hot air blows.
The hammer of the gods will drive our ships to new lands,
To fight the horde, singing and cry: Toronto, I am coming!
From Bloomberg:
Business bankruptcy filings in the U.S. increased 49 percent in April from a year earlier, the biggest gain so far in 2008, as the slowing economy prompted more companies to shut down.
Business petitions rose to 5,173 during the month, according to statistics compiled from court records by Jupiter eSources LLC in Oklahoma City…..
“When you go into a downturn, the cyclical industries tend to get hit,” said Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado. “Any sudden downshift in growth will generate rises in these numbers.”
Uh-oh. We have an italics epidemic. Let me try something.
Or, if that didn’t work, maybe this will.
I can’t take any credit. Methinks that the italics eradication came from higher up.
I’ll take credit…you have to enter a whole string of closing brackets to guarantee it.
A single close “em” or close “i” just won’t do it, eh? So much for my gentle approach.
This local icon was destroyed today that survived Camille ,and Katrina..
Seems a new condo is going in…Sick.
http://www.sunherald.com/278/story/538532.html#recent_comm
off
More on Fannie and Freddie from the NY Times:
http://tinyurl.com/5ah5nk
My fave quote (3rd page): “But the biggest risk, analysts say, is that both companies [Fannie & Freddie] are betting that the housing market will rebound by 2010. If the housing malaise lasts longer, unexpected losses could overwhelm their reserves, starting a chain of events that could result in a federal bailout.”
If they’re counting on a 2010 rebound, they’re screwed.
Sounds more like they are counting on the federal bailout.
Stay vigilant, fight it with everything you have.
Fannie Mae to the rescue: “The government-chartered company will handle refinancings of non-delinquent mortgages for as much as 120 percent of property values when it owns the existing loans, the Washington-based company said today in a statement. Fannie Mae also said it will buy “jumbo” mortgages, or those bigger than $417,000, for the same prices as smaller loans.”