Walking Away From Homes Is A New Mentality
Some housing bubble news from Wall Street and Washington. Bloomberg, “Toll Brothers Inc., the largest U.S. luxury-home builder, reported its third straight quarterly loss as tumbling demand forced the company to write down land values. The five largest U.S. builders have reported a combined $3.4 billion in losses in their most recent quarters, hurt by what CEO Robert Toll described today as a ‘downward spiral’ of home prices.”
“The average price of net contracts signed in the second quarter was $534,000, down 26 percent from a year earlier and 7.9 percent lower than the previous three months. The lower sales prices were partly due to fewer sales in expensive markets such as California and Manhattan.”
“The net value of contracts fell 58 percent to $496.5 million from a year earlier. The order backlog, or homes under contract that have yet to be sold, declined 50 percent to $2.08 billion.”
The Associated Press. “Toll said the company will continue to offer incentives to get people to buy homes - a concession uncharacteristic of Toll Brothers that speaks to the severity of the housing market.”
“But Deutsche Bank analyst Nishu Sood said the builder should more aggressively discount because ‘by holding prices the company is just delaying the inevitable as prices are unlikely to revisit boom time levels for a prolonged period.’”
“The quarter included a pretax write-down of $288.1 million, which included $85 million from joint ventures with other builders on land development. Net contracts, an indication of future business, fell by 58 percent to $496.5 million in the quarter from a year ago. Cancellations totaled $234.1 million.”
“The average home price on net contracts fell to $534,000 from $710,000 in 2007’s second quarter.”
“Residential Capital LLC, the mortgage lending unit of GMAC LLC, said Tuesday it needs more than three times more cash to stay in business than it estimated just weeks ago.”
“ResCap estimates it now needs about $2 billion in cash by the end of June to meet liquidity demands, according to a regulatory filing with the Securities and Exchange Commission. It previously estimated it needed just $600 million by the end of the month.”
The Wall Street Journal. “Delinquencies on loans originated by GMAC-RFC (U.K.) Ltd. rose sharply this year, according to data from Moody’s Investors Service, potentially putting a host of U.S. and European banks at risk of losses on GMAC-RFC loans that they have purchased.”
“Bradford & Bingley PLC Monday said that 5% of acquired loans it holds, which include those from GMAC-RFC, are three months or more in arrears, leading it to take a £36 million ($70.7 million) impairment charge in the four months to April 30.”
The Independent. “The first signs of a collapse in Britain’s buy-to-let property market emerged yesterday as Bradford & Bingley, the UK’s largest lender to private landlords, revealed a 50 per cent jump in arrears on its mortgage book over the first four months of the year.”
“The picture was much worse within one of its books of business - which it acquired from the US lender GMAC-RFC in 2005 - where buy-to-let arrears were up almost 80 per cent to 3.5 per cent of the total.”
“B&B represents 20 per cent of lending across the British buy-to-let sector. The number of buy-to-let mortgages has more than doubled over the past four years, as thousands of new amateur landlords looked to cash in on the meteoric rise in residential property prices.”
“However, rents failed to keep up with the rise in prices, leaving many landlords committed to monthly mortgage payments which were greater than their regular rental income.”
“John Postlethwaite, of Punter Southall Financial Management, the financial consultants, said: ‘In the past three to four years we have experienced a buy-to-let boom, mainly fuelled by private landlords purchasing a second or third property, putting down a minimum deposit and borrowing the maximum available. At the time this was not a problem, as money was plentiful and cheap. Unfortunately, that happy scenario does not exist any more.’”
“Mr Postlethwaite added that many landlords could now see their mortgage rates jump by as much as 2 percentage points as they come to the end of their current deals, putting them under further pressure.”
“‘The worry is, if we get a situation where large numbers of private landlords are trying to offload properties at the same time and needing to do it quickly because they cannot afford the new mortgage payments, property prices will fall even further and faster than they are now,’ he said.”
“Ratings cuts at three of the biggest U.S. securities firms coupled with management shakeups at Wachovia Corp. and Washington Mutual Inc. yesterday triggered concern that the mortgage slump has yet to reach a bottom.”
“While Wall Street’s top executives have insisted the housing crisis is waning, mounting evidence suggests otherwise, said Robert Eisenbeis, head of research at the Federal Reserve Bank of Atlanta from 1996 to 2006. He expects losses to be higher than banks’ forecasts as the worst real-estate decline since the Great Depression continues and foreclosures rise.”
“‘There may be another shoe to fall,’ said Eisenbeis. ‘The real puzzle to me is why these firms didn’t jump on the opportunity to really come to grips with the financial situation they were facing.’”
“Lenders’ losses have accompanied declines in home prices in 20 U.S. metropolitan areas where they have dropped 17 percent from July 2006 through March, according to the S&P/Case-Shiller home-price index. Bank of America Corp. CEO Kenneth Lewis expects that number to reach 25 percent in the next two years.”
“‘It’s going to be bigger than that,’ said David Olson, president of Wholesale Access Mortgage Research in Columbia, Maryland, and a former economist at Freddie Mac. ‘People are walking away from homes. This is a new mentality.’”
From Newsday. “Paul Brennan never handled a short sale - and barely ever used the phrase - until about six months ago.”
“But since then, Prudential Douglas Elliman, where Brennan is The Hamptons regional manager, has handled about 10 short sales across the South Fork, he said. ‘It is a new phrase for me,’ said Brennan, who has worked in real estate in The Hamptons for nearly 30 years.”
“Over the past year across the East End there’s been a noticeable increase in ‘lis pendens’ - the first legal foreclosure notice - and even foreclosure auctions, which take place in courtrooms or on town hall steps. Among the houses in the initial stage of foreclosure is one now on the market for $19 million in very upscale Bridgehampton.”
“‘It’s more expensive out here, especially for the local people who are living out here every day,’ said East Hampton police dispatcher Steve Blanchard, who is about four months behind on his $650,000 mortgage and is now in contract for a short sale. ‘And with the economy going down, it’s going to get worse.’”
“Indeed, his real estate agent, John Brady now specializes in short sales, currently handling 14 in The Hamptons.”
“Homeowners have been getting their home equity lines of credit frozen or pared down by lenders trying to cut risks.”
“It happened to Bay Shore dentist Michael Sherman, who can’t touch his $100,000 line for bath renovations because he’s got little equity in his home, and to Lido Beach homeowner Suzanne Dzolan, whose $200,000 limit was halved soon after she paid back what she borrowed to redo the house.”
“‘It’s almost hurt me to be someone who was a good borrower,’ said Dzolan, who works for a mortgage broker. ‘They just felt they could take the luxury and cut it.’”
“Retired firefighter Paul Porcello said he was going to buy an Amityville house until a $5,000 check, drawn on a HELOC on a rental property, bounced. ‘The next day, I get a letter saying they lowered my line from $144,500 to $10,000,’ said Porcello, who lives in Rockaway Park.”
“Sherman expected his lender’s move because the value of his home, along with others, has dropped: ‘It’s hard to admit that it’s not worth $530,000 today.’”
The Star Telegram. “This weekend, 100 new North Texas homes will be auctioned — with starting bids as much as 60 percent off the original listing price. The homes up for auction were all built by Arlington-based Classic Century Homes. Original asking prices range from $112,000 for a home in Fort Worth to $469,950 for a home in Mansfield.”
“‘Our starting bid is $49,000, and previous values go up to almost half a million dollars,’ said Ted Embry, VP of Real Estate Disposition Corp., which is conducting the auction.”
“The auctioned homes could affect the values of neighboring homes, said Cheryl Hunt with Ebby Halliday Realtors. She has a listing in the Emerald Park development of far north Fort Worth, where 10 homes will be auctioned Saturday.”
“‘If everything were to sell under market value, it hurts every home,’ she said.”
“The three Elk Ridge homes up for auction have starting bids of $59,000 and were originally listed at more than $144,000, according to auction materials.”
“‘Even if you got the homes for $90,000 of $100,000, you’d be getting a bargain,’ said Nancy D’Angelo, a Burleson homeowner who often goes walking through nearby Elk Ridge. ‘I can’t even imagine them building them for that much.’”
The Rocky Mountain News. “Experts in the real estate community are divided over whether a Canadian developer’s decision to pull the plug on its $165 million, 51-story luxury condominium project at 1401 Lawrence is a harbinger of things to come or an isolated incident.”
“When the project was announced in January 2006, it was heralded as the tallest residential development in Denver’s history. It promised to change Denver’s skyline.”
“But that all came to a halt on Friday, when Great Gulf closed its $1.5 million sales center and released this statement: ‘As you are aware, the downturn in the U.S. real estate market continues, and unfortunately Denver is no exception. Due to these conditions, Great Gulf Colorado, LLC has not achieved the requisite pre-sales to go forward with the 1401 Lawrence project and, regrettably, is canceling the project.’”
“There are currently 1,787 condos and 1,339 rental units under construction in the Denver area, so the loss of 1401 Lawrence accounts for less than 5 percent of the 3,126 total units going forward, said John Desmond, of the Downtown Denver Partnerhip.”
“Jeff Selby, co-developer of the Four Seasons under construction across from 1401, said he is not surprised the tower isn’t going forward, because Gulf had not yet lined up its financing, which is extremely difficult since the subprime collapse last August.”
“For example, developer Randy Nichols lost his initial financing for the Spire condo project, a couple of blocks from 1401 Lawrence, before he found a new lender.”
“‘I do not think this is a sign of things to come, but a sign of things that already have happened’ in the financial markets, Selby said.”
The Review Journal. “It offered such a tidy solution for a land-constrained city: Go vertical, with luxury high-rises to draw in upscale buyers from around the world.”
“When it began three to four years ago, the push toward towering condominium skyscrapers quickly became one of the hottest real estate trends in Las Vegas, with high-profile names including Ivana Trump, George Clooney and New York’s Related Group jumping into the market to invest in, build or brand major projects.”
“But the same market realities restraining residential construction in Las Vegas have at least temporarily put a ceiling on the city’s reach for the skies.”
“Numbers from the Greater Las Vegas Association of Realtors and research firm SalesTraq show about 820 resale units in high-rise condo towers on the local market the first week in May, with closings in the month between March and April coming in at around 20 units. At that sales rate, it’ll take roughly 3 1/2 years to churn through the high-rise resales on the market.”
“Buyers who locked in sales agreements three years ago when the high-rise trend took flight and the broader local market peaked in sales and median prices are walking away at closing today, said Larry Murphy, president of SalesTraq.”
“‘People who bought units on contract in 2005 are aware the market in 2008 is nothing like the market they bought in,’ Murphy said. ‘But appraisals are coming in at whatever they agreed to pay on their contract three years ago. People are saying, ‘We don’t think that appraisal is right, and we don’t want to close at that price.’ A lot of people have been unwilling or unable to come to the closing table.’”
“Buyers who do close on their units often put them on the market immediately, compounding already-big supplies, said Renee Burrows, a Realtor with Nevada Realty Solutions. Speculators looking to flip condos populate the resale markets.”
“Even buyers with excellent credit, cash in the bank and 20 percent down payments aren’t having much luck — banks are quoting them the double-digit interest rates often associated with riskier hard-money loans, said Bruce Hiatt, co-owner of Luxury Realty Group in Las Vegas.”
“It could be years before supplies and prices stabilize, experts said. That’s because homeowners hungry to flip units aren’t the only contributors to rising condo supplies.”
“The 3 1/2-year stockpile of high-rise resales on the market doesn’t include new condos set to come online in the next few months and years.”
“Las Vegas contains 9,168 completed high-rise units, with an additional 794 condos in presale stages and another 12,497 condos under construction. Yet, the market moved just 4,202 units in the three-plus years between January 2005 and April 2008.”
“Burrows, in the meantime, is counseling her clients — just one of whom has purchased a resale high-rise unit — to purchase inside luxury towers only if they plan to hold the property for a while, either as a primary home or a vacation spot.”
“‘Short-term speculative flips have pretty much gotten our market where it is,’ she said. ‘To stabilize the market, we need a reversal of everything that’s happening now. We need buyers who actually want to live in these products, and we need mortgage-underwriting guidelines to loosen up.’”
“‘It’s all coming to a pretty sad ending right now,’ said Murphy of the housing oversupply and the loan shortage.”
The LA Times. “The opening of Plams Place was as celebrity-packed and media-saturated as you would expect from a George Maloof event associated with the Palms. This was vintage Maloof milking press out of each stage of his project’s development. And the plan worked with US, People, ABC radio and many others crowded for space on the valet side of the entrance behind a rope.”
“Maloof is opening his condominium/hotel tower (in which the rooms can be converted into hotel rooms if the owner is out of town) amid the worst real estate meltdown in Vegas history.”
“‘Sometimes you can’t help when you open. You just have to work hard and live through it. There are always challenges,’ Maloof says of the unfortunate timing of his two openings.”
“The final stage of Palms Place is proving ‘challenging’ (one of Maloof’s favorite words) as well. Palms place sold out its 599 units, including 21 penthouses, three years ago. But even that hasn’t proven total protection from the current economy.”
“Maloof notes: ‘People put 20% down. Now we just have to collect the rest for closing in very challenging financial times.’”
“Still, Palms Place has had it easier than most competitors, including Trump International, which still has available units in that recently opened hotel/condo.”
“Owner Jessica Simpson sounded as excited to own a condo as if she had completed a marathon: ‘Owning a condo in Vegas is surreal. I never thought I would own a condo in Vegas. But I went for it and did it, and I am proud that I did it, and I am impressed actually.’”
“As for how often the singer intends to be in residence at her Palms Place unit, Simpson offered one of her trademark headscratchers by way of an answer: ‘I hope that I stay here more than I ever thought that I would.’”
I’ve been following this boob for years:
‘Hiatt said he expects closings inside pricey new towers on the Strip to push up values and improve buyer interest in high-rises in 2010. Plus, rising prices of commodities such as steel, concrete, copper and even land mean bigger replacement values, and those construction costs must figure into future condo prices, Hiatt said. The land under Sky Las Vegas, for example, cost $4 million an acre in 2004. It’s worth $34 million an acre today, he said.’
‘We’ll see all future luxury high-rises in that (CityCenter) range because of rising replacement costs,’ Hiatt said. ‘There’s no way to build these towers for less. You could not build them for today’s prices. Everything is going through dramatic price increases. How can we say we need to roll back prices when costs of commodities are skyrocketing?’
He’s the ‘high-rise specialist’ in LV. Note to Bruce; it doesn’t matter what it cost to build if nobody wants it. I hope you bought several!
“You could not build them for today’s prices.”
They shouldn’t have been built at yesterdays prices either you blithering boob.
Hey, I’m just waiting for two-bedrooms in Panorama to come up in craigslist for less than $1500/mo!
It’s Vegas, baby, let it ride!
Virgin Atlantic airlines just added a sixth (6) weekly non stop flight to Las Vegas directly from Heathrow London. Theses strip
condos are being marketed overseas to Europeans who will be paying 50 cents on the dollar. London is the financial capital of the world, bigger than New York. Yes, there is overbuilding and foreclosures, but Vegas still bringing in the folks with $$$$ from overseas
Build it and they won’t come…
The United States producer price index increased 6.9% in the year to March, while that for crude goods increased more than 30%. Like a bowling ball swallowed by a python, that inflation will move through the economic system and eventually be reflected in consumer prices. Indeed, it may already be showing up there; the seasonally unadjusted consumer price index for March was up 0.9% (an annual rate of around 11%) and only a heroic seasonal adjustment of 0.6%, double the next largest seasonal adjustment for any month in the last ten years, brought the figure down to an acceptable 0.3%.
Double the biggest “seasonal adjustment” in the last ten years? And the best it can do is bring March’s annualized inflation to almost 4%?
Except, as I will add for the zillionth time, for the people who buy gold and silver…hint, hint, hint.
Each time that gold or silver go down, buy more until you have the stuff stacked all over the house and you are tripping over all the piles of silver and gold, bruising your shins, which hurts. If you don’t, you will spend the rest of your life living in the dirt and wishing you had, begging for money and table scraps from those who did.
At least, that is how it has worked out in history! Hey! This economics stuff is easy!
“Except, as I will add for the zillionth time, for the people who buy gold and silver…hint, hint, hint”.
Right you are, but prepare for flake, one HBBer has said he would invest in Whale Turds first(wonder how he’ll collect them?). See… People are smart, and they are everywhere.
US Dollar index
http://quotes.ino.com/chart/?s=NYBOT_DX&v=dmax
Goldlast5years
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=gld&sid=0&o_symb=gld&freq=2&time=12
Check out VGPMX and VGELX yourself!
flake = flack
forgot the link!
http://www.dailyreckoning.com/Writers/Mogambo/DREssays/MG060208.html
I love the Magambo guru writing, but he talks about the increase in MZM without discussing the money evaporation that is occuring in housing. The question is: what is the net creation?
We currently have the dollar and RE going down in value at the same time?????
This did not happen in the 1930’s when the dollar went up and RE went down.
I sold my 20 year home in CA in 2004 and invested in natural resources and metals.
I am currently a happy camper!
We currently have the dollar and RE going down in value at the same time?????
Yes. Said differently, MZM is going up (which is driving the dollar down) and many loans are going bad which will vacuum up the dollars from MZM.
So you are correct, this is not what happened in the 30s. And Mogambo ignored the vacuuming.
I suspect that when gold hits $1,000/oz there’ll be another sell off.. only this time everyone will be prepared, and the fall will be faster, steeper and deeper than last time.
You forgot to mention that you were quoting the Mogambo Guru.
Yes, I was going to mention that, too, as soon as I scrounged up the link. Worst case, quote marks are tolerable on an occasional basis if you can find the link/source. Giving credit to original authorship is a proper and well-respected tradition here.
What would happen if we built all of these overpriced, “luxury” POS condos in the middle of this God forsaken, sun baked desert…and the FOOLS didn’t …buy them ?
“Oh my goodness, Toto…? I don’t believe we’re in Kansas any more !
“It happened to Bay Shore dentist Michael Sherman, who can’t touch his $100,000 line for bath renovations because he’s got little equity in his home, and to Lido Beach homeowner Suzanne Dzolan, whose $200,000 limit was halved soon after she paid back what she borrowed to redo the house.”
“‘It’s almost hurt me to be someone who was a good borrower,’ said Dzolan, who works for a mortgage broker. ‘They just felt they could take the luxury and cut it.’”
Um, they think the HELOC account is like THEIR money in the bank?
Borrowed money is like income to these people.
For most people in the US income, loan, and gift are equivalent.
I am getting so sick of people whining because they can’t live like European noblemen on their borrowed money. Seriously, this country needs to get rid of the entitlement mentality and accept that you can’t play if you don’t work…real work that is, not “equity building” as most stockbrokers and realtwhores define it. Friggin’ A…
“Seriously, this country needs to get rid of the entitlement mentality and accept that you can’t play if you don’t work”
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Considering that one of the major political parties will probably tonight formally decide which of their cradle-to-grave socialists to put up for election, and thousands of “gimme, gimme, gimme mine!” voters will be cheering and fainting over (his) every entitlement-laden word, you’re going to be waiting a very, very long time before seeing your wishes for this country in action.
I seriously anticipate that in the next 22 weeks the idea of “universal housing”, ie - raise taxes on “the rich” so that everyone can “own” a home of their own will be proposed by the “it takes a village” party.
In all fairness, the other party has given away even more free money in the form of “tax breaks” to their fave special interests, in the middle of an expensive war that they started…but instead of taking their lumps, they expect their children to pay for it.
What war in American history was funded with tax breaks, especially for big oil and corporate interests? None that I can think of. This is deficit spending in its purest form…
Real conservatives favor a balanced budget, not just tax breaks. There is no conservative party in this country, IMO, just a bunch of whining xenophobes masquerading as one.
Boy that says it in a nutshell.
xenophobes masquerading as conservatives.
They want theirs and “yours” too. Meanwhile
badmouthing “your” desire to keep yours.
Like a mean game of tag football. Tear it outa their hands
and its yours.
Yep. Don’t forget the barrage of cynical, nasty messages that essentially say, expect nothing from your government.
On a brighter note, gold is up another negative $4. Hurry and buy yours today, it’s the bestest infestment evar!
The only thing worse than a “tax and spend” Democrat is a “don’t tax and spend” Republican.
Whatever happened to don’t tax and don’t spend?
The biggest problem today is not $30MM here or there for pet projects, it’s that you can’t take away or reduce Social Security and/or Medicare benefits without losing your next election. Because of that, I can’t see a significant number of politicians working this down route from either side of the aisle. Therefore, Social Security and Medicare are here to stay without significant near-term changes to the outflow part of the equation. So, more money needs to come into the government coffers on the inflow side within the next decade.
So, unless we can get 51 Senators the majority of Reps, and our President to grow a pair, we need to answer the question:
Do the children of boomers pay for Social Security/Medicare for their parents? (the current Democratic approach)
Or do the grandchildren of the boomers pay for Social Security/Medicare for their grandparents? (the current Republican approach)
Personally, I abhor borrowing money, so I’m inclined to take our lumps and figure out a way to pay for yesterday’s programs today and try to change things for the next generations to stop the entitlement attitude (think pension plans vs. 401k plans).
Financially, however, as long as some idiot is willing to lend the US money for 30 years at a fixed rate of 4.6%, perhaps we should start issuing 40 and 50-year bonds, borrow as much as we can get our hands on to get through the next 20-30 years, and screw the lenders by later inflating away the debt. We still would need to fix the entitlement programs.
“biggest problem today is not $30MM here or there for pet projects, it’s that you can’t take away or reduce Social Security and/or Medicare benefits without losing your next election.”
I think you’re forgetting something. I am OWED this social security. I’ve PAID for it and therefore it isn’t a “entitlement” or “benefit”. If the nutjobs decide they don’t want to honor what they owe me,(unlikely now that 80% of the population see what the GOP is about), then I want my contributions back.
I think you’re forgetting something. I am OWED this social security. I’ve PAID for it and therefore it isn’t a “entitlement” or “benefit”
Exeter - I’m assuming you’re serious here. (And guessing you won’t see. ;))
It doesn’t matter if you are owed (or OWED) it. The bottom line is that we can’t afford it. For everyone in the country to full collect on their SS in the next 2 decades requires the impoverishment of my generation and my children’s generation.
You paid taxes so your parents could retire. If you are close to retirement age, there is a good chance you will get back at least your premiums. I’m paying taxes into a system that will be bankrupt when I get there. I’ll never see a dime, whether I’m “owed” it or not.
Setting up SS without regard to need or ability to work=an entitlement program. It was an immoral scheme from the get go meant to kick old people out of the work force by forcing others to pay for their retirement.
Lest I be accused of hating old people I would like to say that I’m for a social net that is sensitive to income and ability to work. I’ll be accused of hating old people anyway, but at least there’s something written.
How neat. Put everyone in the same basket. I paid SS since I was(16) and suspect that according to the “rule of 72″ I would be a Bizzionare, today. Not. Was lucky enough to have my IL’s with us in their last years. Can’t even imagine how “vermontgirl” would handle her “bling MIL” if she came to her house to live. She whines about her all the time on HBB. Grow up, pay your fuel oil bill, plant a garden and give up your cell phone in the Walmart parking lot and $8.00 Starbuck lattes
It will be okay. But probably not.
How neat. Put everyone in the same basket. I paid SS since I was(16) and suspect that according to the “rule of 72″ I would be a Bizzionare, today. Not. Was lucky enough to have my IL’s with us in their last years. Can’t even imagine how “vermontgirl” would handle her “bling MIL” if she came to her house to live. She whines about her all the time on HBB. Grow up, pay your fuel oil bill, plant a garden and give up your cell phone in the Walmart parking lot and $8.00 Starbuck lattes
How and why do I attract these people? You think you get rid of AnnScott and another pops up in their place.
Is it my dashing good looks? Or my almost endless ability to create typos in every sentence?
*sigh* This requires me looking it up but basically within the first 5 years of collecting SS you get every dime you paid in by the time you adjust for inflation. I may be off the mark on the actually time, but basically retirees living now and on SS for more than 10 years have already collected more than they paid in.
And, for the record, we are in a small apartment heated by natural gas, our garden is growing nicely (peas are 3 inches tall), I barely know what my cell phone ring sounds like, and even if I drank coffee it certainly wouldn’t be at Starbucks. Also, my husband deserved way better than he got in the Mother department. I whine here because he doesn’t need to hear about her.
I’ll back you up Vermontergal … I pay in knowing I won’t ever see a penny back. And I don’t remember the details either, but with people retiring early/living longer, you are getting back FAR MORE than you ever paid in, at the expense of the younger generations. But I can’t stop paying, and there’s nothing I can do except know that I won’t see it ….
That’s not an “I hate old people” comment - that’s just the reality for my generation ( gen-x for me).
It takes a village idiot.
Oh! Mayhaps his address is Crawford, TX? I still say his old man should request a refund from Yale. Appears the sheet in “Mom & Pop’s Motel” in Odessa, Tx did not work regarding family planning in 1947.
Ah, Yes. And then their is Jeb and Neil
Old man Bush is a poster child for being spade at a really, really early age.
They better hurry up and “install” that black president in time for all the black people to lose their jobs and houses.
Ok, what exactly is your point here? Are you somehow under the impression only blacks are losing homes?
I can tell you, here in San Diego - the only color that has mattered is green.
Now, why don’t you go back to your beat down 20 year old pick up with the confederate flag and spend your afternoon kicking your dog.
I can’t wait for the idiots of the world like you to die out.
Amen SDnewbie.
Your profiling of Southern whites is no different than his comment about blacks.
Your right.
I apologize.
They had better hurry up and “install” that senior president in time for all of the senior citizens to lose their jobs and houses.
“Now, why don’t you go back to your beat down 20 year old pick up with the confederate flag and spend your afternoon kicking your dog.
I can’t wait for the idiots of the world like you to die out.”
SDNewbie,
Thank you for that. Last night, I received a horribly racist email from a distant family member concerning a certain black man running for the presidency. Lots of his family photos kind of thing with the apparent attempt to scare the living daylights out of us white folks. I replied to her that I was embarrassed that something like that was being disseminated by her to about 100 people. It was so ugly Reconstruction mentality. Whatever your political perference, our country does not need to go so retro on racial stereotyping and fear mongering.
I apologize for going off topic here but I really liked your blunt comeback.
would people please stop callin obama a black man.. he’s half white.
http://vermontersforobama.org/images/ann-dunham-time-cover.jpg
Huh. Vermontsforobama. Nice Time cover, though.
…They separated when he was two years old and later divorced.. [snip]
Of his early childhood, Obama writes: “That my father looked nothing like the people around me — that he was black as pitch, my mother white as milk — barely registered in my mind.”..
http://en.wikipedia.org/wiki/Early_life_and_career_of_Barack_Obama
That would be Fine ….ButNoSingleOne one you are clueless about what is happening in the real world.
No matter what you do or try today, you cannot get a real human being to discus job opportunities.
Send out 100 e-mail resumes all with return receipts, and about a month later you get a notice it was deleted with out being read….lots of them!
You can’t get a ADULT human being on the phone in HR anymore, and forget about walking in and asking for a job.
And unless you are so pitiful and grovel for the walmart job, just show a bit of smart and they automatically classify you as overqualified.
I couldn’t even get a job at a self storage facility that is 4 blocks away, yet they fired the last person who was consistently last, and they hired another one who has to commute probably close to an hour for a $10 hr job and i am 4 blocks away….how do i overcome that level of stupidity?
So get off your high horse people want to work…but we have dumbed down America so badly i am at a loss what to do.
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Seriously, this country needs to get rid of the entitlement mentality and accept that you can’t play if you don’t work
NYC - I had a interesting conversation with a young relative last night. He’s a whiz in IT - moved away to strike out on his own. He said his greatest problem is that he does not get any feedback. When he doesn’t receive a reply or an interview or a job/contract after an interview, no bothers to give any hint of why. He’s a bright, energetic kid, but he’s trying to navigate in a storm and nobody will show him their compass. A real shame.
Chip:
Does he get any interviews with ADULTS, or are they 25 year old Paris Hilton type chicky poos?
I think i even have the AGE thing covered in my resume…but still almost Zero responses…LOL
Production Assistant, Sound Technician, Wedding Videos for TV Crews, Atlanta GA, and Jettstarr Productions, Yonkers, NY
I have been on video shoots this year with Fall Out Boy, Ashley Tisdale, Joy Behar, Paula Abdul, and 12 pack from VH1
“I am at a loss what to do”.
Try changing your deodorant.
Sorry, I couldn’t resist.
Mike
Or try wearing your underwear as underwear, instead of outerwear.
Dzolan needs an attitude adjustment. Lady, if you want people to lend you money because you are a “good borrower” then take out a personal loan, answer a lot of questions about your other debts and general income stability and expect to pay a much higher rate. If you want people to lend you money secured by the value of your house, expect access to the money to go away when the value of the house goes down.
Twerp.
“‘It’s more expensive out here, especially for the local people who are living out here every day,’ said East Hampton police dispatcher Steve Blanchard, who is about four months behind on his $650,000 mortgage and is now in contract for a short sale. ‘And with the economy going down, it’s going to get worse.’”
WTH… I know how this dispatcher got his loan. I still can’t understand what makes people like this tick. How on earth did he think he could ever pay for it. I guess he fell for the NAR’s line… ‘Homes double in price every ten years’ …(Areas may vary, all Real Estate is local)
Anyone know what a dispatchers salary is up there in Richie Rich land?
Not very much as they’re not sworn officers.
I’ll be he is swearing now.
To be fair, this guy may not be the sole breadwinner in the family, but I’m guessing the typical 5/15/80 loan means they are paying about $5K/month including PTI. I’m guessing that translates into an income of $200K/yr assuming no other debt and a DTI of 30%?
I bet they have an IO or pay-option loan. That’s how working class people bought upper-middle class priced houses.
Heck, my husband and I have a gross income slightly higher than that and we are AFRAID of a $5k mortgage payment!! And we will have NO debt when we buy! People are stupid!
“But Deutsche Bank analyst Nishu Sood said the builder should more aggressively discount because ‘by holding prices the company is just delaying the inevitable as prices are unlikely to revisit boom time levels for a prolonged period.’”
Ok, what did you do, Ben Jones? Hmmm?
Did you boot this guy up with sodium-pentathol or something?
Ben, Ben, Ben, just come clean. It will go easier on you if you willingly confess. This poor banking analyst has told the truth, and we certainly can’t have that now can we !?!
Roidy
P.S. BTW, how DID he get away with telling the truth?
Toll Bros probably has their money locked up in land purchases. I see it all around Anchorage…empty lots sitting around that were bought up long ago before the boom, ready to be cash cows once the market recovers.
In the meantime these guys are begging for IRS forgiveness of losses against profits for 4 years instead of 2, as a reward for helping to create the housing crisis. They should be selling all the inventory they have hoarded.
Congress is too smart to see that they would simply be paying the foxes to guard the henhouses, right? oh, wait…
On his way home tonight he might meet up with an unfortunate and untimely “accident”…
The $64,000 Question…
“The real puzzle to me is why these firms didn’t jump on the opportunity to really come to grips with the financial situation they were facing.”
No puzzle, really. Coming to grips with it means acknowledging they are insolvent.
Acknowledging they are insolvent means a day of reckoning with their stockholders.
Day of reckoning means you suddenly realize that you have
spinach in your teeth, you just ate garlic and onions, your deodorant is failing fast, and you are standing in front of the most beautiful person in the world. And you have no $.
How Do you handle that realization?
How smooth are you?
Well, sort of like that!
Has anybody under 30 ever heard of staying at a Hotel in Vegas, in lieu of buying a condo?
______________________________________________________________
“Owner Jessica Simpson sounded as excited to own a condo as if she had completed a marathon: ‘Owning a condo in Vegas is surreal. I never thought I would own a condo in Vegas. But I went for it and did it, and I am proud that I did it, and I am impressed actually.’”
“As for how often the singer intends to be in residence at her Palms Place unit, Simpson offered one of her trademark headscratchers by way of an answer: ‘I hope that I stay here more than I ever thought that I would.’”
Jessica will be equally excited about having the whole building to herself: ” I always wanted something nobody else wanted almost always.”
Pardon me while I go cringe.
“Owner Jessica Simpson sounded as excited to own a condo as if she had completed a marathon: ‘Owning a condo in Vegas is surreal. I never thought I would own a condo in Vegas. But I went for it and did it, and I am proud that I did it, and I am impressed actually.’”
Senator McCain…we may have found you a running mate for Vice President
ROFLMAO.
Jess for VP!!
“‘I do not think this is a sign of things to come, but a sign of things that already have happened’ in the financial markets, Selby said.”
These guys are pretty good at appearing to say a lot without really saying anything.
Economic events are usually not point-like, like a bomb exploding, but typically work on a continuum, and thereby can become important to the economy at large through their long-term movement amongst smaller economic events which can be critical to the overall picture and have results that actually are like a bomb exploding.
There, now you can quote me, MSM, as that made no sense (not intentionally, anyway).
“Even buyers with excellent credit, cash in the bank and 20 percent down payments aren’t having much luck — banks are quoting them the double-digit interest rates often associated with riskier hard-money loans…”
Condos go boom now. Saavy investors - have fun waiting for the GF that can haul a 12% note to buy your $X00,000 sky palace.
“Owner Jessica Simpson sounded as excited to own a condo as if she had completed a marathon…and I am proud that I did it, and I am impressed actually.”
The bar can’t be set any lower than that. Think she qualifies as a “hero” in this day and age?
More than that John! She qualifies as a “Real Financial Hero”!
So what they’re saying here is that this type of speculative purchase is simply reverting to it’s traditional place in the financing spectrum! Asking for 1/3 to 1/2 down on a building/structure you bought for investment purposes used… to be the standard. Why is it such a hardship now?
You really have to wonder about poor Jessica? My daughters told me her tours have been poorly attended/cancelled and her albums/movies don’t sell well either. Perhaps she WILL spend more time there than she ‘thought’ she was going to… in her own mind, kind of way?
Doesn’t it seem like everyone is on tour?
We have this small arena (5,000 seats) in Loveland, and it seems like there are at least 2 concerts there a month (I missed the David Bowie concert!).
Play his music while watching the Crypt Keeper on “Tales from the Crypt.” You’ll get the same effect.
This is the authority on Music…..
http://lefsetz.com/wordpress/
There is no money in selling cds…the money is in touring…and some acts get it!
From the original post:
Toll said the company will continue to offer incentives to get people to buy homes - a concession uncharacteristic of Toll Brothers that speaks to the severity of the housing market.
To which I say:
Mr. Toll, I have a suggestion. Why not build your houses properly in the first place? A family friend used to work for your company, and the shoddy construction practices never ceased to amaze him.
In fact, he even coined a slogan, which my mother repeats at every available opportunity:
Toll Brothers Homes: Guaranteed for five years. Then they fall apart.
“Toll said the company will continue to offer incentives to get people to buy homes - a concession uncharacteristic of Toll Brothers that speaks to the severity of the housing market.”
Bob Toll, I laugh at your wimpy incentives…Ha Ha!
” …a San Diego developer desperate to clear inventory is offering potential home buyers a buy-one-get-one-free scheme.”
http://tinyurl.com/3z6o6b
(We all knew it would come to this)
“It offered such a tidy solution for a land-constrained city…”
Land constrained? Vegas is surrounded by desolate land for endless miles. Water constrained yes, but definitely not land constrained.
“‘Our starting bid is $49,000, and previous values go up to almost half a million dollars,’
If they are worth so much then why don’t you start the bidding at zero ?
“Just walk away” We truly have become the generation of walking away from responsibity……..can’t pay? Oh well, sorry……..I guess it goes for houses, cars and even children……(child support back payment way up)
That’s been the American way since forever. Can’t make it in the home country? Walk away. Can’t make in the colonies? Head to the frontier. Can’t make it with the wife and family. Abandon them when you head across the ocean or to the Wild West.
We’re just carrying on our forbears’ time-honored tradition. My economics professor summed it up as Cowboy Economics: Foul Your Nest, Then Head West.
Walking away from debt obligations is not a time honored tradition. Now, looking for better opportunities that’s another story all together.
It sure as heck is. That was the underlying motivation for pioneering, after all. If you had it good, you stayed. If you were trapped, you had nothing to lose and a lot to gain by walking away and making a new start elsewhere.
Land companies created numerous Nowheresvilles all over the country, selling town lots to suckers, creating land booms in the process. Those booms collapsed, leaving bagholders stuck, many with no choice but to walk away. Farmers were in the same fix when they borrowed from the banks, only to see crop failures and no way to repay their debts. You then saw the ripple effects with business owners in towns.
Heck, since divorce was illegal or fiendishly difficult to procure, it was simpler to just walk away. Move west, start a new life under a new name, forget the spouse and the debts you left behind. Why do you think so many of the small banks back then went bust? Because the locals couldn’t or wouldn’t repay their loans.
You must have read Howard Zinn. Americans love the myth, can’t stand the reality.
“Now, looking for better opportunities that’s another story all together.”
Yes, “better opportunities” for the so-called entrepreneurial set means starting your own Ponzi scheme and moving out of the country to the Cayman Islands before you get caught.
True, but we have raised the ‘it’s not fair’ society. It just wouldn’t be fair to expect someone to live up to their obligations if the going gets tough, it may hurt their self esteem. When the instant gratification doesn’t happen, ‘it’s not fair’. We can’t have anyone feeling bad about themselves, everyone is a winner baby.
Pets too… I read about pets being taken to the local shelter because people could not afford them anymore! How SAD!! Even grandma can afford Alpo, but people cannot afford it for their pets!
Alice’s Adventures in Real Estate Blunderland
First Chapter: Down The Rabbit Hole…
“‘The worry is, if we get a situation where large numbers of private landlords are trying to offload properties at the same time and needing to do it quickly because they cannot afford the new mortgage payments, property prices will fall even further and faster than they are now,’ he said.”
“Indeed, his real estate agent, John Brady now specializes in short sales, currently handling 14 in The Hamptons.”
Sub-Prime Organic Soup …Donald Stump… get in there and “snap those up”
“…banks are quoting them the double-digit interest rates often associated with riskier hard-money loans, said Bruce Hiatt, co-owner of Luxury Realty Group in Las Vegas.”
Do I here 14+ % ? Don’t just poke’em in the eye…Kill the Beast!
Seeing as property values have dropped around 40% from 3 years ago in Vegas, how many of those 20% deposits have been forfeited already?
I’d guess not more than about 500 units…
________________________________________________________________
“The final stage of Palms Place is proving ‘challenging’ (one of Maloof’s favorite words) as well. Palms place sold out its 599 units, including 21 penthouses, three years ago. But even that hasn’t proven total protection from the current economy.”
“Maloof notes: ‘People put 20% down. Now we just have to collect the rest for closing in very challenging financial times.’”
Am I nuts? Or have I entered some parallel universe where things don’t make any sense:
“‘Short-term speculative flips have pretty much gotten our market where it is,’ she said.
Right! (Well, mostly, there were a lot of serial-movers/refinancers who weren’t exactly flipping, but were parti of the problem”)
‘To stabilize the market, we need a reversal of everything that’s happening now.
Agreed!
We need buyers who actually want to live in these products,
That’s a good start! This way there wouldn’t be a glut of housing units nobody wants.
and we need mortgage-underwriting guidelines to loosen up.’”
Here’s where I spit out my coffee! Does she thing giving money away is the way out of all of this!
“‘It’s all coming to a pretty sad ending right now,’ said Murphy of the housing oversupply and the loan shortage.”
What loan shortage? With 20% down on a primary residence, or 30% down on an investment venture, and sufficient income, you can get any loan you want. At great rates, too!
“‘People who bought units on contract in 2005 are aware the market in 2008 is nothing like the market they bought in,’ Murphy said. ‘But appraisals are coming in at whatever they agreed to pay on their contract three years ago. People are saying, ‘We don’t think that appraisal is right, and we don’t want to close at that price.’ A lot of people have been unwilling or unable to come to the closing table.’”
Hmmm…..did I miss something? I’ve never gone under contract 3 years before something was completed, so I don’t know how this works. What do these kinds of contracts say? Do they lock you into the appraised price at the time of signing, with no option to re-appraise upon completion? I’m sure that the builders added some protection for themselves so that this very thing did not happen. And that if it did, that the *buyers* would pay some kind of penalty.
I’m just looking for how this works, and do these people have a leg to stand on. Anyone?
BayQT~
make a good topic- builders contracts are notoriously one sided
bank short sale agreements are even wackier
Apparently these stupid borrowers did not have protection clauses in the contract should they fail to get reasonable financing 3 years in the future even if the property went down in value verses their original contract price . The borrowers never even enjoyed the benefits of living in the property at the higher price before the values crashed and financing became more difficult .
Apparently ,in spite of prices crashing ,if the borrower doesn’t go through with the contract they lose their deposit . Contracts can be that unfair .I also think a sharp attorney could think of a hundred points that could get the borrowers out of that contract . You would of thought these borrowers would of at least made sure they made the contract subject to obtaining a chosen financing and also subject to a valid appraisal in the future .
Whenever you buy a property ,make it subject to obtaining a stated loan interest rate and qualifying and the appraisal coming in with your lender of choice ,even if you only have a 30 day escrow .Rates can skyrocket in a short time or lenders requirements can change quickly and you don’t want to lose your deposit just because the market changed . I even put in a sales contract the highest interest rate I’m willing to pay (and the type of loans I’m willing to apply for ),in case the market changes quickly.
These borrowers were not protecting themselves ,but of course a lot of them were just bright eyed easy money flippers .
Thanks, Wiz. Very good info. And I agree with you that the borrowers were high on the current market frenzy. All they saw as they looked ahead were dollar signs. That’s it!
Common sense was not in the picture AT ALL.
BayQT~
It depends on the state. To my understanding, you can’t take non-refundable deposits in advance like this in CA. You can elsewhere (which is why the concept is foreign to Californians, but not Floridians/Nevadans, etc.).
I think all contracts are going to be different in various respects with the main difference being whether the state allows non-refundable deposits at an early stage in the development, or not. If not, the buyer is going to be pretty protected. If so, there are plenty of flavors of contract, I’m sure. Like:
The down payment is considered liquidated damages–you don’t close, you lose your 20%, builder needs to find a new seller and has no recourse to you as a buyer.
No liquidated damages provision, which means that the builder could sue for specific performance (you committed to close, you must close or are in breach).
Pay as you go. Put 20% down initially, then more down as the project progresses. The builders use these non-refundable deposits in order to get the bank to lend the rest of the money.
This generally is why it is risky to build high-rise condos in CA. You need to build them all before you can have a firm commitment on 1.
“While Wall Street’s top executives have insisted the housing crisis is waning, mounting evidence suggests otherwise, said Robert Eisenbeis, head of research at the Federal Reserve Bank of Atlanta from 1996 to 2006. He expects losses to be higher than banks’ forecasts as the worst real-estate decline since the Great Depression continues and foreclosures rise.”
“‘There may be another shoe to fall,’ said Eisenbeis. ‘The real puzzle to me is why these firms didn’t jump on the opportunity to really come to grips with the financial situation they were facing.’”
Question Mr. Eisenbeis: Did you every come to grips with what you and your boss Mr. Greenspan were doing while at the FED? A little late to come to the table and claim you have clean hands!
““‘If everything were to sell under market value, it hurts every home,’ she said.”
Yes, we first-time homebuyers feel your pain, oh the insufferable pain (sob!!!) of finding a house at an affordable, bargain price.
Where’s my violin? My heart just freaking bleeds for you, lady…
Buy a house and get one free.
http://biz.yahoo.com/rb/080603/usa_housing_sale.html
I have seen these row houses. Right on the sidewalk, in old Escondido.
“If you don’t know what to do with your free home, you could always give it away,” Berry said.
Uh huh. Do you think the mortgage would only be on the big house, and the row house free and clear. Hmmmmmmmmm.
mission acCOMPlished
“The auctioned homes could affect the values of neighboring homes, said Cheryl Hunt with Ebby Halliday Realtors. She has a listing in the Emerald Park development of far north Fort Worth, where 10 homes will be auctioned Saturday.”
“‘If everything were to sell under market value, it hurts every home,’ she said.”
“Bradford & Bingley, the UK’s largest lender to private landlords, revealed a 50 per cent jump in arrears on its mortgage book over the first four months of the year.”
That name works well in this case, “Bingley” - if you pronounce it “Binge”-ly.
Workers Strike at Project CityCenter and Cosmopolitan
http://tinyurl.com/4s7nkz
“Union workers on MGM Mirage Inc.’s multibillion dollar CityCenter project struck late Monday after talks broke down between the Nevada Building and Construction Trades Council, casino giant MGM Mirage and project general contractor Perini Building Co. Construction workers have also walked off of the Cosmopolitan Resort project, another Perini run project.”
“The strike follows the deaths of six men on the CityCenter project, the latest death occurred Saturday when 39-year-old Dustin Tarter, a crane worker, was killed. Two workers have died on the Cosmopolitan project.”
He will strike to save lives, “We’re all behind this. Whatever has to be done to stop the men dying continuously. One man per month is what we have going right now. That’s not okay.”
Rushing a project scheduled to open in late 2009 seems rather pointless, especially if it’s costing lives. By then, differences of a few months or even a year may not matter all that much.
if i remember right one guy got cut in two by a falling elevator counterbalance..
i’ll go out on a limb here and make a wild guess that the unions will settle for more money .. given that, the project will come in on time and the death toll, whatever it ends up being, will be tolerable.
While this is a large project, it doesn’t seem overly complicated. Having 6 workers dead so far seems like a lot. Slowing it down at the same wages may not be a bad option from a worker perspective. There may not be much work available once this is done. You don’t have any more money at the end, but you do have money coming in longer and maybe you’re still alive and/or uninjured at the end too.
Is there any sort of exit clause for buyers if the project’s delayed?
Would investors push hard to complete this on schedule, even in a slow market, to keep buyers locked in?
As far as the contractors, i’d bet there are bonuses for finishing ahead of schedule and penalties for being late. As for the grunts it won’t matter either way.
..agree that stretching it out would be best.. take your time and ensure a few extra paychecks.. it’ll be years before construction rebounds in LV.
i dunno about exit clauses.. i suppose that a buyer could insist on some sort of clause.. anything’s negotiable. But these projects were hot and people were in manic-buying-mode, lining up to purchase.. i think about 90% of one building was ’snapped up’ in the first 7 days.
test
Isn’t this project the one with the MGM’s partner being the daughter of a Triad (Asian Mafia) boss?